Simon Kuznets

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pages: 303 words: 74,206

GDP: The World’s Most Powerful Formula and Why It Must Now Change by Ehsan Masood

Alan Greenspan, anti-communist, bank run, banking crisis, biodiversity loss, Bob Geldof, Bretton Woods, centre right, clean water, colonial rule, coronavirus, COVID-19, Credit Default Swap, decarbonisation, deindustrialization, Diane Coyle, energy security, European colonialism, financial engineering, government statistician, happiness index / gross national happiness, income inequality, indoor plumbing, Intergovernmental Panel on Climate Change (IPCC), Isaac Newton, job satisfaction, Kickstarter, Mahbub ul Haq, mass immigration, means of production, Meghnad Desai, Mohammed Bouazizi, Robert Solow, Ronald Reagan, Sheryl Sandberg, Silicon Valley, Simon Kuznets, Skype, statistical model, the scientific method, The Spirit Level, Washington Consensus, wealth creators, zoonotic diseases

There was, however, one sector of the economy where incomes not only had stayed constant but had even managed to register a small increase. This was the column marked “Government.” According to Simon Kuznets and his team, between 1929 and 1932 income distributed by government entities was up from $6.5 billion to $6.8 billion, reflecting a small increase in public works programs.5 In many ways, the rise in government spending isn’t as intriguing as is its inclusion in Kuznets’s national accounts. This is because, for much of his professional life, Simon Kuznets fought the inclusion of government spending in GDP. Data from businesses formed the cornerstone of his methodology, and he was confident in the quality of the data he and his team had gathered.

But he misjudged the US administration’s determination, indeed its insistence, that public spending be included as a positive indicator for economic health. By 1941 Simon Kuznets’s days as America’s chief national accountant were over. It was Keynes who had effectively helped his younger American colleagues win the argument and defined GDP for generations to come. NOTES 1. David Moss and Joseph P. Gownder, “The Origins of National Income Accounting,” Harvard Business Review, December 30, 1998. This is a Harvard Business School case study in which the authors reproduce three primary documents, including the 1932 US Senate resolution in which Simon Kuznets was commissioned. 2. Carol S. Carson, “The History of the United States National Income and Product Accounts,” Review of Income and Wealth 21 (1975): 153–181.

—Richard Stone, “The Fortune Teller,” Economica X (1943) John Maynard Keynes’s role in constructing what eventually became GDP, and his concurrent debate with Simon Kuznets about the place for public spending—the G in the GDP formula—has been one of economic history’s best-kept secrets. But Keynes wasn’t working alone. He had a partner in this endeavor, another of his students and fellow Cambridge economist Richard Stone (1913–1991). After Simon Kuznets, Stone, too, would win a Nobel Prize for his work on national income accounting.1 Shortly before his death on April 21, 1946, Keynes persuaded the powers at the University of Cambridge to create a new Department of Applied Economics.


pages: 460 words: 107,454

Stakeholder Capitalism: A Global Economy That Works for Progress, People and Planet by Klaus Schwab, Peter Vanham

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, 3D printing, additive manufacturing, agricultural Revolution, air traffic controllers' union, Anthropocene, Apple II, Asian financial crisis, Asperger Syndrome, basic income, Berlin Wall, Big Tech, biodiversity loss, bitcoin, Black Lives Matter, blockchain, blue-collar work, Branko Milanovic, Bretton Woods, British Empire, business process, capital controls, Capital in the Twenty-First Century by Thomas Piketty, car-free, carbon footprint, carbon tax, centre right, clean tech, clean water, cloud computing, collateralized debt obligation, collective bargaining, colonial rule, company town, contact tracing, contact tracing app, Cornelius Vanderbilt, coronavirus, corporate governance, corporate social responsibility, COVID-19, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, cryptocurrency, cuban missile crisis, currency peg, cyber-physical system, decarbonisation, demographic dividend, Deng Xiaoping, Diane Coyle, digital divide, don't be evil, European colonialism, Fall of the Berlin Wall, family office, financial innovation, Francis Fukuyama: the end of history, future of work, gender pay gap, general purpose technology, George Floyd, gig economy, Gini coefficient, global supply chain, global value chain, global village, Google bus, green new deal, Greta Thunberg, high net worth, hiring and firing, housing crisis, income inequality, income per capita, independent contractor, industrial robot, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invisible hand, James Watt: steam engine, Jeff Bezos, job automation, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, Khan Academy, Kickstarter, labor-force participation, lockdown, low interest rates, low skilled workers, Lyft, manufacturing employment, Marc Benioff, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, Martin Wolf, means of production, megacity, microplastics / micro fibres, Mikhail Gorbachev, mini-job, mittelstand, move fast and break things, neoliberal agenda, Network effects, new economy, open economy, Peace of Westphalia, Peter Thiel, precariat, Productivity paradox, profit maximization, purchasing power parity, race to the bottom, reserve currency, reshoring, ride hailing / ride sharing, Ronald Reagan, Salesforce, San Francisco homelessness, School Strike for Climate, self-driving car, seminal paper, shareholder value, Shenzhen special economic zone , Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, social distancing, Social Responsibility of Business Is to Increase Its Profits, special economic zone, Steve Jobs, Steve Wozniak, synthetic biology, TaskRabbit, The Chicago School, The Future of Employment, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the scientific method, TikTok, Tim Cook: Apple, trade route, transfer pricing, Uber and Lyft, uber lyft, union organizing, universal basic income, War on Poverty, We are the 99%, women in the workforce, working poor, working-age population, Yom Kippur War, young professional, zero-sum game

Notes 1 Kuznets was born in Pinsk, then part of the Russian Empire. Nowadays, Pinsk is part of Belarus. 2 “Political Arithmetic: Simon Kuznets and the Empirical Tradition in Economics”, Chapter 5: The Scientific Methods of Simon Kuznets, Robert William Fogel, Enid M. Fogel, Mark Guglielmo, Nathaniel Grotte, University of Chicago Press, p. 105, https://www.nber.org/system/files/chapters/c12917/c12917.pdf. 3 A direct quotation of Kuznets’ autobiography for the Nobel Prize committee. The Nobel Prize, “Simon Kuznets Biographical,” 1971, https://www.nobelprize.org/prizes/economic-sciences/1971/kuznets/biographical/. 4 “GDP: A brief history,” Elizabeth Dickinson, Foreign Policy, January 2011, https://foreignpolicy.com/2011/01/03/gdp-a-brief-history/. 5 Ibidem. 6 “Beyond GDP: Economists Search for New Definition of Well-Being,” Der Spiegel, September 2009, https://www.spiegel.de/international/business/beyond-gdp-economists-search-for-new-definition-of-well-being-a-650532.html. 7 Phone interview with Diane Coyle by Peter Vanham, August 18, 2019. 8 Measured in constant 2010 US dollars. 9 World Bank, GDP Growth (annual %), 1961–2018, https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG. 10 “What's a Global Recession,” Bob Davis, The Wall Street Journal, April 2009, https://blogs.wsj.com/economics/2009/04/22/whats-a-global-recession/. 11 United States Census Bureau, International Data Base, September 2018, https://www.census.gov/data-tools/demo/idb/informationGateway.php. 12 “World Economic Outlook,” International Monetary Fund, Updated July 2019, https://www.imf.org/en/Publications/WEO/Issues/2019/07/18/WEOupdateJuly2019. 13 “World Economic Outlook,” International Monetary Fund, April 2019, Appendix A https://www.imf.org/~/media/Files/Publications/WEO/2019/April/English/text.ashx?

, James Atlas, October 1989, https://www.nytimes.com/1989/10/22/magazine/what-is-fukuyama-saying-and-to-whom-is-he-saying-it.html. 22 “Pioneers in China,” 1993, ZF Heritage, zf.com/mobile/en/company/heritage_zf/heritage.html. 23 Eurofound, “Pacts for Employment and Competitiveness: Ravensburger AG,” Thorsten Schulten, Hartmut Seifert, and Stefan Zagelmeyer, April 2015, https://www.eurofound.europa.eu/es/observatories/eurwork/case-studies/pecs/pacts-for-employment-and-competitiveness-ravensburger-ag-0. 24 GDP Growth, Annual (%), 1961–2019, The World Bank, https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG. 25 International Monetary Fund, New Data on Global Debt, https://blogs.imf.org/2019/01/02/new-data-on-global-debt/. 26 Gross debt position, Fiscal Monitor, April 2020, International Monetary Fund, https://www.imf.org/external/datamapper/datasets/FM. 27 Global Footprint Network, https://www.footprintnetwork.org/2019/06/26/press-release-june-2019-earth-overshoot-day/. 2 Kuznets’ Curse : The Issues of the World Economy Today There might have been no better person to piece together the puzzle of the world economy today than Simon Kuznets, a Russian-born1 American economist, who died in 1985. It may seem odd at first that a man who passed away in the mid-1980s would be so relevant to today's global economic challenges, but I believe the issues we are facing today may not have become so problematic had we better heeded the lessons of this Nobel Prize–winning economist.

That we are facing this myriad of economic crises may well be Kuznets’ curse. It is the ultimate “I told you so” of an oft misunderstood economist and forms the root of the feeling of betrayal people have toward their leaders. But before we get deeper into this curse, let's examine who exactly Simon Kuznets was and find out what people remembered him for. The Original Kuznets’ Curse: GDP as Measure of Progress Simon Smith Kuznets was born in Pinsk, a city in the Russian Empire in 1901, the son of Jewish parents.3 As he made his way through school, he showed a talent for mathematics and went on to study economics and statistics at the University of Kharkiv (now in Ukraine).


pages: 460 words: 107,454

Stakeholder Capitalism: A Global Economy That Works for Progress, People and Planet by Klaus Schwab

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, 3D printing, additive manufacturing, agricultural Revolution, air traffic controllers' union, Anthropocene, Apple II, Asian financial crisis, Asperger Syndrome, basic income, Berlin Wall, Big Tech, biodiversity loss, bitcoin, Black Lives Matter, blockchain, blue-collar work, Branko Milanovic, Bretton Woods, British Empire, business process, capital controls, Capital in the Twenty-First Century by Thomas Piketty, car-free, carbon footprint, carbon tax, centre right, clean tech, clean water, cloud computing, collateralized debt obligation, collective bargaining, colonial rule, company town, contact tracing, contact tracing app, Cornelius Vanderbilt, coronavirus, corporate governance, corporate social responsibility, COVID-19, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, cryptocurrency, cuban missile crisis, currency peg, cyber-physical system, decarbonisation, demographic dividend, Deng Xiaoping, Diane Coyle, digital divide, don't be evil, European colonialism, Fall of the Berlin Wall, family office, financial innovation, Francis Fukuyama: the end of history, future of work, gender pay gap, general purpose technology, George Floyd, gig economy, Gini coefficient, global supply chain, global value chain, global village, Google bus, green new deal, Greta Thunberg, high net worth, hiring and firing, housing crisis, income inequality, income per capita, independent contractor, industrial robot, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invisible hand, James Watt: steam engine, Jeff Bezos, job automation, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, Khan Academy, Kickstarter, labor-force participation, lockdown, low interest rates, low skilled workers, Lyft, manufacturing employment, Marc Benioff, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, Martin Wolf, means of production, megacity, microplastics / micro fibres, Mikhail Gorbachev, mini-job, mittelstand, move fast and break things, neoliberal agenda, Network effects, new economy, open economy, Peace of Westphalia, Peter Thiel, precariat, Productivity paradox, profit maximization, purchasing power parity, race to the bottom, reserve currency, reshoring, ride hailing / ride sharing, Ronald Reagan, Salesforce, San Francisco homelessness, School Strike for Climate, self-driving car, seminal paper, shareholder value, Shenzhen special economic zone , Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, social distancing, Social Responsibility of Business Is to Increase Its Profits, special economic zone, Steve Jobs, Steve Wozniak, synthetic biology, TaskRabbit, The Chicago School, The Future of Employment, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the scientific method, TikTok, Tim Cook: Apple, trade route, transfer pricing, Uber and Lyft, uber lyft, union organizing, universal basic income, War on Poverty, We are the 99%, women in the workforce, working poor, working-age population, Yom Kippur War, young professional, zero-sum game

Notes 1 Kuznets was born in Pinsk, then part of the Russian Empire. Nowadays, Pinsk is part of Belarus. 2 “Political Arithmetic: Simon Kuznets and the Empirical Tradition in Economics”, Chapter 5: The Scientific Methods of Simon Kuznets, Robert William Fogel, Enid M. Fogel, Mark Guglielmo, Nathaniel Grotte, University of Chicago Press, p. 105, https://www.nber.org/system/files/chapters/c12917/c12917.pdf. 3 A direct quotation of Kuznets’ autobiography for the Nobel Prize committee. The Nobel Prize, “Simon Kuznets Biographical,” 1971, https://www.nobelprize.org/prizes/economic-sciences/1971/kuznets/biographical/. 4 “GDP: A brief history,” Elizabeth Dickinson, Foreign Policy, January 2011, https://foreignpolicy.com/2011/01/03/gdp-a-brief-history/. 5 Ibidem. 6 “Beyond GDP: Economists Search for New Definition of Well-Being,” Der Spiegel, September 2009, https://www.spiegel.de/international/business/beyond-gdp-economists-search-for-new-definition-of-well-being-a-650532.html. 7 Phone interview with Diane Coyle by Peter Vanham, August 18, 2019. 8 Measured in constant 2010 US dollars. 9 World Bank, GDP Growth (annual %), 1961–2018, https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG. 10 “What's a Global Recession,” Bob Davis, The Wall Street Journal, April 2009, https://blogs.wsj.com/economics/2009/04/22/whats-a-global-recession/. 11 United States Census Bureau, International Data Base, September 2018, https://www.census.gov/data-tools/demo/idb/informationGateway.php. 12 “World Economic Outlook,” International Monetary Fund, Updated July 2019, https://www.imf.org/en/Publications/WEO/Issues/2019/07/18/WEOupdateJuly2019. 13 “World Economic Outlook,” International Monetary Fund, April 2019, Appendix A https://www.imf.org/~/media/Files/Publications/WEO/2019/April/English/text.ashx?

, James Atlas, October 1989, https://www.nytimes.com/1989/10/22/magazine/what-is-fukuyama-saying-and-to-whom-is-he-saying-it.html. 22 “Pioneers in China,” 1993, ZF Heritage, zf.com/mobile/en/company/heritage_zf/heritage.html. 23 Eurofound, “Pacts for Employment and Competitiveness: Ravensburger AG,” Thorsten Schulten, Hartmut Seifert, and Stefan Zagelmeyer, April 2015, https://www.eurofound.europa.eu/es/observatories/eurwork/case-studies/pecs/pacts-for-employment-and-competitiveness-ravensburger-ag-0. 24 GDP Growth, Annual (%), 1961–2019, The World Bank, https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG. 25 International Monetary Fund, New Data on Global Debt, https://blogs.imf.org/2019/01/02/new-data-on-global-debt/. 26 Gross debt position, Fiscal Monitor, April 2020, International Monetary Fund, https://www.imf.org/external/datamapper/datasets/FM. 27 Global Footprint Network, https://www.footprintnetwork.org/2019/06/26/press-release-june-2019-earth-overshoot-day/. 2 Kuznets’ Curse : The Issues of the World Economy Today There might have been no better person to piece together the puzzle of the world economy today than Simon Kuznets, a Russian-born1 American economist, who died in 1985. It may seem odd at first that a man who passed away in the mid-1980s would be so relevant to today's global economic challenges, but I believe the issues we are facing today may not have become so problematic had we better heeded the lessons of this Nobel Prize–winning economist.

That we are facing this myriad of economic crises may well be Kuznets’ curse. It is the ultimate “I told you so” of an oft misunderstood economist and forms the root of the feeling of betrayal people have toward their leaders. But before we get deeper into this curse, let's examine who exactly Simon Kuznets was and find out what people remembered him for. The Original Kuznets’ Curse: GDP as Measure of Progress Simon Smith Kuznets was born in Pinsk, a city in the Russian Empire in 1901, the son of Jewish parents.3 As he made his way through school, he showed a talent for mathematics and went on to study economics and statistics at the University of Kharkiv (now in Ukraine).


pages: 251 words: 69,245

The Haves and the Have-Nots: A Brief and Idiosyncratic History of Global Inequality by Branko Milanovic

Berlin Wall, Branko Milanovic, colonial rule, crony capitalism, David Ricardo: comparative advantage, deglobalization, Deng Xiaoping, endogenous growth, Fall of the Berlin Wall, financial deregulation, full employment, Gini coefficient, high net worth, illegal immigration, income inequality, income per capita, Joseph Schumpeter, means of production, open borders, Pareto efficiency, plutocrats, purchasing power parity, Simon Kuznets, very high income, Vilfredo Pareto, Washington Consensus, zero-sum game

Vignette 1.5 - Was Socialism Egalitarian? Vignette 1.6 - In What Parisian Arrondissement Should You Live in the ... Vignette 1.7 - Who Gains from Fiscal Redistribution? Vignette 1.8 - Can Several Countries Exist in One? Vignette 1.9 - Will China Survive in 2048? Vignette 1.10 - Two Students of Inequality: Vilfredo Pareto and Simon Kuznets CHAPTER 2 Vignette 2.1 - Why Was Marx Led Astray? Vignette 2.2 - How Unequal Is Today’s World? Vignette 2.3 - How Much of Your Income Is Determined at Birth? Vignette 2.4 - Should the Whole World Be Composed of Gated Communities? Vignette 2.5 - Who Are the Harraga? Vignette 2.6 - The Three Generations of Obamas Vignette 2.7 - Did the World Become More Unequal During Deglobalization?

As for income distribution within nations, Pareto failed to define a theory of change in it, although “failure” is not a wholly appropriate term simply because Pareto thought, and believed to have empirically proved, that income distribution must be more or less fixed and thus that there were no laws of its “change” with development. There was, Pareto argued, only a “law of its fixity.” It wasn’t until 1955 that Simon Kuznets, a Russian-American economist and statistician, proposed the first real theory of what propels change in income distribution. (He is profiled, together with Pareto, in Vignette 1.10.) He argued—having had access to not many more data points than Pareto (although the data were of a different kind, household, not fiscal, surveys)—that inequality among people is not the same regardless of the type of society but varies predictably as society develops.

There are some earlier and incomplete surveys from nineteenth-century England and the early-twentieth-century United States and Soviet Russia, but we can hardly speak of anything serious and usable before approximately the early 1950s. (You may recall that Pareto’s speculations were based on fiscal data, whereas Simon Kuznets had hardly a dozen surveys to draw upon—even as late as 1955.) For developing countries the situation is even worse; very often there is nothing before the 1970s or even the 1980s. This is particularly true for African nations, where household surveys developed, often with the assistance of international organizations, only in the 1980s.23 What about the two most populous countries in the world?


pages: 264 words: 76,643

The Growth Delusion: Wealth, Poverty, and the Well-Being of Nations by David Pilling

Airbnb, Alan Greenspan, banking crisis, Bernie Sanders, Big bang: deregulation of the City of London, Branko Milanovic, call centre, carbon tax, centre right, clean tech, clean water, collapse of Lehman Brothers, collateralized debt obligation, commoditize, Credit Default Swap, credit default swaps / collateralized debt obligations, dark matter, Deng Xiaoping, Diane Coyle, Donald Trump, double entry bookkeeping, Easter island, Erik Brynjolfsson, falling living standards, financial deregulation, financial engineering, financial intermediation, financial repression, Gini coefficient, Glass-Steagall Act, Goldman Sachs: Vampire Squid, Google Hangouts, Great Leap Forward, Hans Rosling, happiness index / gross national happiness, Higgs boson, high-speed rail, income inequality, income per capita, informal economy, invisible hand, Jeremy Corbyn, job satisfaction, Mahatma Gandhi, Mahbub ul Haq, market fundamentalism, Martin Wolf, means of production, military-industrial complex, Monkeys Reject Unequal Pay, mortgage debt, off grid, old-boy network, Panopticon Jeremy Bentham, peak oil, performance metric, pez dispenser, profit motive, purchasing power parity, race to the bottom, rent-seeking, Robert Gordon, Ronald Reagan, Rory Sutherland, science of happiness, shareholder value, sharing economy, Simon Kuznets, sovereign wealth fund, TED Talk, The Great Moderation, The Wealth of Nations by Adam Smith, Thomas Malthus, total factor productivity, Tragedy of the Commons, transaction costs, transfer pricing, trickle-down economics, urban sprawl, women in the workforce, World Values Survey

How about providers of services, whose contributions to society—healthy minds (psychoanalysts), humor (clowns), education (teachers)—may be harder to count than horseshoes or bushels of wheat? In the twentieth century communist countries largely ignored services altogether. Even today we struggle to measure their economic contribution. Modern national accounts of the type used by virtually every country in the world today only really began to take shape in the 1930s. Simon Kuznets is usually credited with the invention of GDP, the quintessence of the national accounting system. But Kuznets, rather like Victor Frankenstein, soon saw his creation take on a life—and a direction—of its own. * * * — The man who is said to have invented our way of measuring growth was born in 1901 into a merchant family in the town of Pinsk in what was then part of the Russian empire.

Joshua Abramsky and Steve Drew were not bored; they were responding to a diktat from Eurostat, the statistical arm of the European Union, which wanted EU nations to standardize how they calculated national income. One of the anomalies in how countries compile their national accounts is their treatment of illegal activities, such as gambling, prostitution, and the handling of stolen goods. Simon Kuznets thought only activities that contribute to human welfare should be counted, but who was to decide what they were? He thought advertising was worthless. Perhaps someone else would judge video games a waste of time, or stop counting alcohol and cigarettes or junk food on the grounds that they are bad for one’s health.

Adherence to standard methodology notwithstanding, Ryan is at pains to point out that Kenya’s economic statistics are in no way comparable with those of, say, the US. “You are measuring elephants and rhubarb,” he says, conjuring up a metaphor that makes the comparison of apples and oranges seem mundane. So he has adapted the “rhubarb” methodology designed by Simon Kuznets to measure the US economy to the realities of an “elephant” economy like Kenya’s. “It’s perfectly correct for the developed world,” he says. “It makes admirable sense for the developed world. But it doesn’t necessarily transfer neatly into a developing-country context.” Kenya is a country of roughly 45 million people.


pages: 159 words: 45,073

GDP: A Brief but Affectionate History by Diane Coyle

Alan Greenspan, Asian financial crisis, Berlin Wall, big-box store, Bletchley Park, Bretton Woods, BRICs, business cycle, clean water, computer age, conceptual framework, crowdsourcing, Diane Coyle, double entry bookkeeping, driverless car, en.wikipedia.org, endogenous growth, Erik Brynjolfsson, Fall of the Berlin Wall, falling living standards, financial intermediation, global supply chain, happiness index / gross national happiness, hedonic treadmill, income inequality, income per capita, informal economy, Johannes Kepler, John von Neumann, Kevin Kelly, Les Trente Glorieuses, Long Term Capital Management, Mahbub ul Haq, mutually assured destruction, Nathan Meyer Rothschild: antibiotics, new economy, Occupy movement, Phillips curve, purchasing power parity, Robert Shiller, Robert Solow, Ronald Reagan, shareholder value, Silicon Valley, Simon Kuznets, The Wealth of Nations by Adam Smith, Thorstein Veblen, University of East Anglia, working-age population

Clark was appointed in 1930 to provide statistics to the newly created National Economic Advisory Council, the first body ever created by the British government to provide formal economic advice. The experience of the Depression created this demand for statistics that might help the government figure out how to bring to an end the unprecedented economic slump. Across the Atlantic, in the United States, Simon Kuznets had a similar motivation. The government of Franklin Delano Roosevelt wanted a clearer picture of the state of an economy trapped in a seemingly endless depression. The National Bureau of Economic Research was requested to provide estimates of national income. Kuznets, who later won the Nobel Memorial Prize in Economic Science for this work, took on the task of developing Clark’s methods and applying them to the U.S. economy.

In a book published in 1996 I noted the phenomenon that growth in GDP for more than a decade had literally not weighed anything: all the incremental value-added growth was in intangibles of one kind or another.15 A measure of the national economy designed for tangible, physical products only is not really a good measure of an increasingly weightless economy. The lesson to draw from this discussion is that GDP is not, and was never intended to be, a measure of welfare. It measures production. As we saw in chapter 1, Simon Kuznets, one of the pioneers of national accounting, was keen to develop a measure of economic welfare. But the demands of wartime meant his ambition was overtaken by the need to measure production and productive capacity, in order to use scarce material resources and labor as efficiently as possible.

“Economists all know that, and yet their everyday use of GNP as the standard measure of economic performance apparently conveys the impression that they are evangelistic worshippers of GNP,” remark William Nordhaus and James Tobin.33 Besides, whether or not the task ought to be measuring welfare rather than GDP was debated in the early years of GDP’s development, as we saw in chapter 1, and it has been debated ever since. Simon Kuznets, working on measuring national income in the 1930s, wrote: It would be of great value to have national income estimates that would remove from the total the elements which, from the standpoint of a more enlightened social philosophy than that of an acquisitive society represent dis-service rather than service.


pages: 235 words: 62,862

Utopia for Realists: The Case for a Universal Basic Income, Open Borders, and a 15-Hour Workweek by Rutger Bregman

"World Economic Forum" Davos, Alan Greenspan, autonomous vehicles, banking crisis, Bartolomé de las Casas, basic income, Berlin Wall, Bertrand Russell: In Praise of Idleness, Branko Milanovic, cognitive dissonance, computer age, conceptual framework, credit crunch, David Graeber, Diane Coyle, driverless car, Erik Brynjolfsson, everywhere but in the productivity statistics, Fall of the Berlin Wall, Ford Model T, Francis Fukuyama: the end of history, Frank Levy and Richard Murnane: The New Division of Labor, full employment, George Gilder, George Santayana, happiness index / gross national happiness, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, income inequality, invention of gunpowder, James Watt: steam engine, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Kevin Kelly, Kickstarter, knowledge economy, knowledge worker, Kodak vs Instagram, low skilled workers, means of production, megacity, meta-analysis, microcredit, minimum wage unemployment, Mont Pelerin Society, Nathan Meyer Rothschild: antibiotics, Occupy movement, offshore financial centre, Paul Samuelson, Peter Thiel, post-industrial society, precariat, public intellectual, radical decentralization, RAND corporation, randomized controlled trial, Ray Kurzweil, Ronald Reagan, Rutger Bregman, Second Machine Age, Silicon Valley, Simon Kuznets, Skype, stem cell, Steven Pinker, TED Talk, telemarketer, The future is already here, The Future of Employment, The Spirit Level, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, Tyler Cowen, Tyler Cowen: Great Stagnation, universal basic income, wage slave, War on Poverty, We wanted flying cars, instead we got 140 characters, wikimedia commons, women in the workforce, working poor, World Values Survey

Susan Steed and Helen Kersley, “A Bit Rich: Calculating the Real Value to Society of Different Professions,” New Economics Foundation (December 14, 2009). http://www.neweconomics.org/publications/entry/a-bit-rich 29. Kevin Kelly, “The Post Productive Economy,” The Technium (January 1, 2013). http://kk.org/thetechnium/2013/01/the-post-produc 30. Simon Kuznets, “National Income, 1929-1932,” National Bureau of Economic Research (June 7, 1934). http://www.nber.org/chapters/c2258.pdf 31. Coyle, p. 14. 32. Simon Kuznets, “How to Judge Quality,” The New Republic (October 20, 1962). 9 Beyond the Gates of the Land of Plenty 1. OECD, “Aid to developing countries rebounds in 2013 to reach an all-time high” (April 8, 2014). http://www.oecd.org/newsroom/aid-to-developing-countries-rebounds-in-2013-to-reach-an-all-time-high.htm 2.

A few months earlier, President Hoover had dispatched a number of Commerce Department employees around the country to report on the situation. They returned with mainly anecdotal evidence that aligned with Hoover’s own belief that economic recovery was just around the bend. Congress wasn’t reassured, however. In 1932, it appointed a brilliant young Russian professor by the name of Simon Kuznets to answer a simple question: How much stuff can we make? Over the next few years, Kuznets laid the foundations of what would later become the GDP. His initial calculations caused a flurry of excitement and the report he presented to Congress became a national bestseller (itself adding to the GDP, one 20-cent copy at a time).

“The GDP and related data are like beacons that help policymakers steer the economy toward the key economic objectives.”21 At the start of the 20th century the U.S. government employed a grand total of one economist; more accurately, an “economic ornithologist,” whose job was to study birds. Less than 40 years later, the National Bureau of Economic Research payrolled some 5,000 economists, in the sense that we use the word. These included Simon Kuznets and Milton Friedman, ultimately two of the century’s most important thinkers.22 All across the world, economists began to play a dominant role in politics. Most were educated in the United States, the cradle of the GDP, where practitioners pursued a new, scientific brand of economics revolving around models, equations, and numbers.


pages: 274 words: 66,721

Double Entry: How the Merchants of Venice Shaped the Modern World - and How Their Invention Could Make or Break the Planet by Jane Gleeson-White

Affordable Care Act / Obamacare, Alan Greenspan, Bernie Madoff, Black Swan, British Empire, business cycle, carbon footprint, corporate governance, credit crunch, double entry bookkeeping, full employment, Gordon Gekko, income inequality, invention of movable type, invention of writing, Islamic Golden Age, Johann Wolfgang von Goethe, Johannes Kepler, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, Mahbub ul Haq, means of production, Naomi Klein, Nelson Mandela, Ponzi scheme, shareholder value, Silicon Valley, Simon Kuznets, source of truth, spice trade, spinning jenny, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, traveling salesman, upwardly mobile

It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything, in short, except that which makes life worthwhile. Like many before and after him—including the GNP’s creator, Simon Kuznets—Senator Robert Kennedy believed there was something profoundly wrong with the way we calculate our national wealth and with the numbers we produce to do so, such as the GNP and the Gross Domestic Product (GDP). As Kennedy pointed out, these numbers generate alarming anomalies: in their parlance cigarette advertising is worth more than the health of a child.

Over the next four years in the United States, 11,000 banks failed, production collapsed by more than a half and unemployment soared, peaking at 13 million or nearly one-quarter of the workforce. At sea in their attempts to develop a coherent response to the crisis, the administrations of Herbert Hoover and then Franklin Delano Roosevelt commissioned Russian-born economist Simon Kuznets to develop comprehensive estimates of the income of the United States to guide their policies. In March 1933, Roosevelt succeeded Hoover as US president and immediately implemented his ‘Hundred Days’: ‘a presidential barrage of ideas and programmes unlike anything known to American history’. The following year, in May 1934, the British economist John Maynard Keynes went to America to see the New Deal in action.

It was not until the depression of the 1930s that the idea of looking at a national economy in terms of accounting became widespread and the first attempts were made to calculate not just a nation’s income but also its expenditure. The first official measure of the overall US economy—measures of national savings, consumption and investment—was devised by Simon Kuznets and his colleagues in the 1930s to provide policymakers with a comprehensive picture of what was going on. No comprehensive measures of national income and output had existed before then. It was the Depression that raised the need for national accounts such as the Gross Domestic Product (GDP)—or, as economist William D.


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Stuffocation by James Wallman

3D printing, Abraham Maslow, Adam Curtis, Airbnb, Alvin Toffler, back-to-the-land, Berlin Wall, big-box store, Black Swan, BRICs, carbon footprint, Cass Sunstein, clean water, collaborative consumption, commoditize, creative destruction, crowdsourcing, David Brooks, Fall of the Berlin Wall, Future Shock, Great Leap Forward, happiness index / gross national happiness, hedonic treadmill, high net worth, income inequality, Intergovernmental Panel on Climate Change (IPCC), James Hargreaves, Joseph Schumpeter, Kitchen Debate, Martin Wolf, mass immigration, McMansion, means of production, Nate Silver, Occupy movement, Paul Samuelson, planned obsolescence, post-industrial society, post-materialism, public intellectual, retail therapy, Richard Florida, Richard Thaler, sharing economy, Silicon Valley, Simon Kuznets, Skype, spinning jenny, Streisand effect, The future is already here, The Signal and the Noise by Nate Silver, The Theory of the Leisure Class by Thorstein Veblen, Thorstein Veblen, Tyler Cowen, Tyler Cowen: Great Stagnation, World Values Survey, Zipcar

“Unemployment soared to 25% in the UK” Source: Stephen Constantine, Unemployment in Britain Between the Wars (London: Longman, 1980). “30% unemployed in Australia” Source: Australian government figures. Simon Kuznets Read more about the rise of economics and the life of Simon Kuznets in Robert Fogel, Simon S Kuznets April 30, 1901–July 9, 1985 (Cambridge, MA: NBER, 2000); and Simon Kuznets et al., National Income, 1929-32 (NBER, June 1934). “As recently as the late 19th century, economics was considered of such little importance that at Oxford University, for example, there was only one part-time lecturer, and at American universities it was merely one section of one segment of an entire course” Sources: Robert Fogel, Simon S Kuznets April 30, 1901–July 9, 1985 (Cambridge, MA: NBER, 2000); and Gerard M Koot, English Historical Economics, 1870-1926 : The Rise of Economic History and Neomercantilism (Cambridge: Cambridge University Press, 1987).

How could any leader make plans when he could not see the whole picture? So the US senate commissioned a private enterprise called the National Bureau of Economic Research (NBER), which had been collecting records for some time, to create a set of national income accounts. The lead researcher on the project was a man by the name of Simon Kuznets. Born in Pinsk in what was then Russia in 1901, Kuznets had briefly served as a statistician in Odessa in the Ukraine. He had arrived in the US in 1922. He had distinguished himself, so far, only at Columbia University. He was about to create his magnum opus. It is hard for us to imagine economics as anything other than what it is today – a central consideration of our lives.

Ron Inglehart Again, Ron Inglehart, “The Silent Revolution in Europe: Intergenerational Change in Post-Industrial Societies”, American Political Science Review Vol. 65, No. 4, December 1971. To see the shift away from materialistic values, see the World Values Survey (www.worldvaluessurvey.org). The changing make-up of our economy Compare the type of items in Simon Kuznets, National Income, 1929-32 (Cambridge, MA: NBER, June 1934) with those in today’s economies. Consider also, Francisco J Buera and Joseph P Kaboski. “The Rise of the Service Economy”, American Economic Review Vol. 102, No. 6, 2012. For an easy introduction, see the video infographic “The iPhone Economy” at www.nytimes.com.


The State and the Stork: The Population Debate and Policy Making in US History by Derek S. Hoff

affirmative action, Alan Greenspan, Alfred Russel Wallace, back-to-the-land, British Empire, business cycle, classic study, clean water, creative destruction, David Ricardo: comparative advantage, demographic transition, desegregation, Edward Glaeser, feminist movement, full employment, garden city movement, Garrett Hardin, George Gilder, Gregor Mendel, Gunnar Myrdal, guns versus butter model, Herman Kahn, immigration reform, income inequality, income per capita, invisible hand, It's morning again in America, Jane Jacobs, John Maynard Keynes: technological unemployment, Joseph Schumpeter, labor-force participation, Lewis Mumford, manufacturing employment, mass immigration, New Economic Geography, new economy, old age dependency ratio, open immigration, Paul Samuelson, peak oil, pensions crisis, profit motive, public intellectual, Ralph Waldo Emerson, road to serfdom, Robert Solow, Ronald Reagan, scientific management, Scientific racism, secular stagnation, Simon Kuznets, The Chicago School, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, Thorstein Veblen, Tragedy of the Commons, trickle-down economics, urban planning, urban sprawl, W. E. B. Du Bois, wage slave, War on Poverty, white flight, zero-sum game

Norton, 1973), he wrote, “That modern economic growth meant a strikingly accelerated rise not only in product per capita but also in population does not imply that the latter was a necessary condition for the former” (2). 119. Simon Kuznets, Six Lectures on Economic Growth (New York: Free Press of Glencoe, 1959), 37. The next year, Kuznets suggested that larger populations 298 notes to chapter four happily produce more geniuses (“Population Change and Aggregate Output,” in Demographic and Economic Change in Developed Countries [Princeton: Princeton University Press, 1960], 324–39). 120. Simon Kuznets, “Toward a Theory of Economic Growth,” in National Economic Welfare at Home and Abroad, ed. Robert Lekachman (Garden City, N.Y.: Doubleday, 1955; New York: Russell & Russell, 1961), 23. 121.

The US should have a population policy authoritative enough to be quotable.”112 Frank Notestein, director of the Princeton Office of Population Research, told Osborn, “It does seem wise to have meetings devoted to problems of the United States for their intrinsic merits and for the fact that it is wise from a public relations point of view.”113 But the largest factor in the Population Council’s growing desire to address domestic issues was the Baby Boom; and the goal was to measure the applicability of the consequences of population growth in the developing world to the United States’ own demographic expansion. The committee members began with an anti–population growth bias.114 But for the first meeting they fielded papers from several influential population experts with a wide range of views: Spengler; Arnold Harberger, a University of Chicago economist; Simon Kuznets, one of the giants of twentieth-century economics; geochemist Harrison Brown; Ansley Coale of Coale-Hoover fame; and Theodore Schultz, an agricultural economist about to relocate to the University of Chicago and emerge as a leading human capital theorist. Spengler, Brown, and Coale represented the pessimists.

He recalled in his memoirs, “I believed that rapid population growth was the main obstacle to the world’s economic development and one of the two main threats to humankind (nuclear war being the other).”44 Simon’s first article on population, drawing on an earlier focus on the economics of advertising, recommended methods for marketing family planning programs in the developing world.45 Almost immediately after joining the population movement, however, Simon’s views shifted 180 degrees to a full rejection of Malthusianism. Simon’s about-face came partly from studying the historical analyses of Simon Kuznets, Richard Easterlin, and others who noted the absence of a strict relationship between population and economic growth, as well as the work of the agricultural and resource economists Ester Boserup, Theodore Schultz, Harold Barnett, and Chandler Morse. Simon’s main epiphany, however, came during a 1969 trip to Washington, D.C., ironically to visit USAID to discuss family planning programs.


pages: 312 words: 91,835

Global Inequality: A New Approach for the Age of Globalization by Branko Milanovic

Asian financial crisis, assortative mating, Berlin Wall, bitcoin, Black Swan, Branko Milanovic, Capital in the Twenty-First Century by Thomas Piketty, centre right, colonial exploitation, colonial rule, David Ricardo: comparative advantage, deglobalization, demographic transition, Deng Xiaoping, discovery of the americas, European colonialism, Fall of the Berlin Wall, Francis Fukuyama: the end of history, full employment, Gini coefficient, Gunnar Myrdal, income inequality, income per capita, invisible hand, labor-force participation, liberal capitalism, low skilled workers, Martin Wolf, means of production, military-industrial complex, mittelstand, moral hazard, Nash equilibrium, offshore financial centre, oil shock, open borders, open immigration, Paul Samuelson, place-making, plutocrats, post scarcity, post-industrial society, profit motive, purchasing power parity, Ralph Nader, Robert Solow, Second Machine Age, seigniorage, Silicon Valley, Simon Kuznets, special economic zone, stakhanovite, trade route, transfer pricing, very high income, Vilfredo Pareto, Washington Consensus, women in the workforce

In Chapter 2 we consider within-nation inequalities, and in Chapter 3, among-nation inequalities. In Chapter 2, I use long-term historical data on income inequality, going back in some cases to the Middle Ages, to reformulate the Kuznets hypothesis, the workhorse of inequality economics. This hypothesis, formulated by Nobel Prize–winning economist Simon Kuznets in the 1950s, states that as countries industrialize and average incomes grow, inequality will at first increase and then decrease, resulting in an inverted-U-shaped curve when one plots inequality level against income. The Kuznets hypothesis has recently been found wanting because of its inability to explain a new phenomenon in the United States and other rich countries: income inequality, which had been decreasing through much of the twentieth century, has recently been on an upswing.

Data source: Author’s calculations from various Forbes lists. 2 Inequality within Countries Introducing Kuznets Waves to Explain Long-Term Trends in Inequality The long swings in income inequality must be viewed as part of a wider process of economic growth and interrelated with similar movements in other elements. —SIMON KUZNETS The Origins of Dissatisfaction with the Kuznets Hypothesis Dissatisfaction with the Kuznets hypothesis—the idea that inequality is low at very low income levels, then rises as the economy develops, and eventually falls again at high income levels—is not new, but recent developments seem to have delivered it a coup de grâce.

Fourth, there is a tension between the concept of development that stresses the development of people within their own countries and a broader concept of development that focuses on the betterment of an individual’s position regardless of where he or she lives. We need to dispose of one fallacy, however, before we move on to discuss these four tensions. The fallacy is the view that the reduction of absolute poverty worldwide would somehow alleviate or even eliminate these tensions. Simon Kuznets dismissed this idea long ago (in 1954). Huge gaps in income and standard of living between, for example, a New Yorker and a member of a tribe in the Amazon render any meaningful contact and comparison of ways of life between them impossible. But large income gaps, that is income gaps smaller than what we called “huge” in the previous sentence, between peoples who belong to the same civilizational circle and interact with each other—which today includes practically everybody in the world—make political tensions worse: “Since it is only by contact that recognition and tension are created … the reduction of physical misery [in underdeveloped countries] … permit[s] an increase rather than a diminution of political tensions” (Kuznets [1958] 1965, 173–174).


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Two Nations, Indivisible: A History of Inequality in America: A History of Inequality in America by Jamie Bronstein

Affordable Care Act / Obamacare, back-to-the-land, barriers to entry, basic income, Bernie Sanders, big-box store, Black Lives Matter, blue-collar work, Branko Milanovic, British Empire, Capital in the Twenty-First Century by Thomas Piketty, clean water, cognitive dissonance, collateralized debt obligation, collective bargaining, Community Supported Agriculture, corporate personhood, crony capitalism, deindustrialization, desegregation, Donald Trump, ending welfare as we know it, Frederick Winslow Taylor, full employment, Gini coefficient, Glass-Steagall Act, income inequality, interchangeable parts, invisible hand, job automation, John Maynard Keynes: technological unemployment, labor-force participation, land reform, land tenure, longitudinal study, low skilled workers, low-wage service sector, mandatory minimum, mass incarceration, minimum wage unemployment, moral hazard, moral panic, mortgage debt, New Urbanism, non-tariff barriers, obamacare, occupational segregation, Occupy movement, oil shock, plutocrats, price discrimination, race to the bottom, rent control, road to serfdom, Ronald Reagan, Sam Peltzman, scientific management, Scientific racism, Simon Kuznets, single-payer health, Strategic Defense Initiative, strikebreaker, the long tail, too big to fail, trade route, transcontinental railway, Triangle Shirtwaist Factory, trickle-down economics, universal basic income, Upton Sinclair, upwardly mobile, urban renewal, vertical integration, W. E. B. Du Bois, wage slave, War on Poverty, women in the workforce, working poor, Works Progress Administration

Being drafted took away male workers’ freedom of choice, forcing them into low-paid employment as soldiers. They were replaced by teenagers, retired workers, women, and members of minority groups. This sent the overall unemployment rate to 1.4 percent, but, Higgs argued, resulted in less comfort and happiness overall. Economist Simon Kuznets pointed out that during World War II, much was spent on war materiel and that war goods do not improve the well-being of Americans, but rather, in moments of existential crisis, make it possible for well-being to exist at all. Kuznets argued that many military products should not even be counted as part of the gross national product (GNP), and of course, to exclude military products from GNP would show a shrinking American productivity during wartime.

Murrow and show producer Fred Friendly gave little sense of what might concretely be done to improve the living conditions of the migrants or the educational prospects of their children, gesturing vaguely in the direction of farmworkers’ unions while at the same time acknowledging the extreme imbalance of power between the migrants and their farm employers. Harvest of Shame was part of a larger discourse about hidden poverty and the costs of economic inequality that emerged in the late Eisenhower administration and then grew louder in the 1960s. In 1962, the historian Gabriel Kolko published Wealth and Power in America. The economist Simon Kuznets had claimed that income in the United States necessarily would become more evenly distributed over time. Kolko attacked Kuznets with a statistical analysis demonstrating that Americans in fact had a remarkable lack of upward mobility. Kolko pointed out that large numbers of Americans could not afford medical expenses nor even to replace their clothing.

Shammas, “A New Look,” 420. 20. Williamson and Lindert, “Three Centuries of American Inequality,” 11, 15, 20. 21. Mark W. Frank, “Inequality and Growth in the United States: Evidence from a New State-Level Panel of Income Inequality Measures,” Economic Inquiry vol. 47 no. 1 (2009): 55–68. 22. Simon Kuznets, “Economic Growth and Income Inequality,” American Economic Review vol. 45 no. 1 (1955): 1–30. 23. Milanovic, Haves and Have-Nots, 91. 24. Williamson and Lindert, “Three Centuries of American Inequality,” 56, 59; Jeffrey Williamson and Peter H. Lindert, American Inequality: A Macroeconomic History (New York: Academic Press, 1980), 258. 25.


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The Great Divergence: America's Growing Inequality Crisis and What We Can Do About It by Timothy Noah

air traffic controllers' union, Alan Greenspan, assortative mating, autonomous vehicles, Bear Stearns, blue-collar work, Bonfire of the Vanities, Branko Milanovic, business cycle, call centre, carbon tax, collective bargaining, compensation consultant, computer age, corporate governance, Credit Default Swap, David Ricardo: comparative advantage, Deng Xiaoping, easy for humans, difficult for computers, Erik Brynjolfsson, Everybody Ought to Be Rich, feminist movement, Ford Model T, Frank Levy and Richard Murnane: The New Division of Labor, Gini coefficient, government statistician, Gunnar Myrdal, income inequality, independent contractor, industrial robot, invisible hand, It's morning again in America, job automation, Joseph Schumpeter, longitudinal study, low skilled workers, lump of labour, manufacturing employment, moral hazard, oil shock, pattern recognition, Paul Samuelson, performance metric, positional goods, post-industrial society, postindustrial economy, proprietary trading, purchasing power parity, refrigerator car, rent control, Richard Feynman, Ronald Reagan, shareholder value, Silicon Valley, Simon Kuznets, Stephen Hawking, Steve Jobs, subprime mortgage crisis, The Spirit Level, too big to fail, trickle-down economics, Tyler Cowen, Tyler Cowen: Great Stagnation, union organizing, upwardly mobile, very high income, Vilfredo Pareto, War on Poverty, We are the 99%, women in the workforce, Works Progress Administration, Yom Kippur War

Upon retiring from NYU in 1945, King became chairman of the Committee for Constitutional Government, an anti–New Deal organization originally founded to oppose Roosevelt’s 1937 court-packing scheme, which outraged King. Well before he died in 1962 at age eighty-two, King saw his legacy eclipsed by the work of a Russian émigré who in 1927 had succeeded King at the NBER and in 1971 would win the Nobel Prize in economics. His name was Simon Kuznets, and among his many lasting contributions to economics was the creation of the analytic foundation for the study of income inequality. Kuznets had (and continues to have) legions of admirers in the economics profession. King was not one of them. In a 1940 letter to one of the NBER’s directors, King quarreled with what he termed Kuznets’s “assumption … that environment and luck are the principal determinants of a persons [sic] success or failure in life.”

But sampling becomes a lot less accurate when you’re measuring trends within a very small subgroup of the larger population. And the proportion of households with annual incomes above $1 million is well under 1 percent.1 Rather than rely on the Current Population Survey for broad-brush data about the rich, Piketty and Saez did what Simon Kuznets had done prior to his groundbreaking 1954 analysis of U.S. income distribution. They looked at data from the Internal Revenue Service. Except perhaps for a very few criminals who possess a superhuman ability to hide enormous quantities of cash, everyone in the United States who makes $1 million or more files a yearly tax return, and the IRS keeps track of precisely how much each of these people rakes in.

Between these two extremes is found inequality of condition, wealth, knowledge—the power of the few, the poverty, ignorance and weakness of all the rest.” 16. In fairness to Kuznets, he himself characterized his income-inequality theory as “5 percent empirical information and 95 percent speculation, some of it possibly tainted by wishful thinking.” 17. Simon Kuznets, “Economic Growth and Income Inequality,” American Economic Review 45, no. 1 (Mar. 1955), 1–28. 18. Steven R. Weisman, The Great Tax Wars (New York: Simon & Schuster, 2002), 353. 19. Claudia Goldin and Robert Margo, “The Great Compression: The Wage Structure in the United States at Mid-Century,” Quarterly Journal of Economics 107, issue 1 (Feb. 1992), 1–34. 20.


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Capitalism in America: A History by Adrian Wooldridge, Alan Greenspan

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Affordable Care Act / Obamacare, agricultural Revolution, air freight, Airbnb, airline deregulation, Alan Greenspan, American Society of Civil Engineers: Report Card, Asian financial crisis, bank run, barriers to entry, Bear Stearns, Berlin Wall, Blitzscaling, Bonfire of the Vanities, book value, Bretton Woods, British Empire, business climate, business cycle, business process, California gold rush, Charles Lindbergh, cloud computing, collateralized debt obligation, collective bargaining, Corn Laws, Cornelius Vanderbilt, corporate governance, corporate raider, cotton gin, creative destruction, credit crunch, debt deflation, Deng Xiaoping, disruptive innovation, Donald Trump, driverless car, edge city, Elon Musk, equal pay for equal work, Everybody Ought to Be Rich, Fairchild Semiconductor, Fall of the Berlin Wall, fiat currency, financial deregulation, financial engineering, financial innovation, fixed income, Ford Model T, full employment, general purpose technology, George Gilder, germ theory of disease, Glass-Steagall Act, global supply chain, Great Leap Forward, guns versus butter model, hiring and firing, Ida Tarbell, income per capita, indoor plumbing, informal economy, interchangeable parts, invention of the telegraph, invention of the telephone, Isaac Newton, Jeff Bezos, jimmy wales, John Maynard Keynes: technological unemployment, Joseph Schumpeter, junk bonds, Kenneth Rogoff, Kitchen Debate, knowledge economy, knowledge worker, labor-force participation, land bank, Lewis Mumford, Louis Pasteur, low interest rates, low skilled workers, manufacturing employment, market bubble, Mason jar, mass immigration, McDonald's hot coffee lawsuit, means of production, Menlo Park, Mexican peso crisis / tequila crisis, Michael Milken, military-industrial complex, minimum wage unemployment, mortgage debt, Myron Scholes, Network effects, new economy, New Urbanism, Northern Rock, oil rush, oil shale / tar sands, oil shock, Peter Thiel, Phillips curve, plutocrats, pneumatic tube, popular capitalism, post-industrial society, postindustrial economy, price stability, Productivity paradox, public intellectual, purchasing power parity, Ralph Nader, Ralph Waldo Emerson, RAND corporation, refrigerator car, reserve currency, rising living standards, road to serfdom, Robert Gordon, Robert Solow, Ronald Reagan, Sand Hill Road, savings glut, scientific management, secular stagnation, Silicon Valley, Silicon Valley startup, Simon Kuznets, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, stem cell, Steve Jobs, Steve Wozniak, strikebreaker, supply-chain management, The Great Moderation, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, too big to fail, total factor productivity, trade route, transcontinental railway, tulip mania, Tyler Cowen, Tyler Cowen: Great Stagnation, union organizing, Unsafe at Any Speed, Upton Sinclair, urban sprawl, Vannevar Bush, vertical integration, War on Poverty, washing machines reduced drudgery, Washington Consensus, white flight, wikimedia commons, William Shockley: the traitorous eight, women in the workforce, Works Progress Administration, Yom Kippur War, young professional

The problem with calculating GDP and MFP over a long period is that the further back you go in time, the more difficult it is to find solid statistics. The U.S. government only began collecting systematic data on national income and product accounts in the 1930s, when it called on the expertise of Simon Kuznets of Stanford University and the National Bureau of Economic Research. For prior data, historians have to rely mainly on the decennial census, which started in the 1790s. Historians supplement official census data with scattered data on industrial production, crops, livestock, and hours worked, but, as Paul David identified, such data were not very accurate before the 1840s.

The Fed then made a desperate situation still worse in the autumn of 1931 by sharply raising interest rates in order to preserve the value of the dollar. In reflecting on this catalogue of errors, it is important to make allowance for circumstances. Policy makers still had only a hazy picture of the national economy. It took the shock of the Great Depression itself to persuade the government to employ Simon Kuznets and the National Bureau of Economic Research to prepare a comprehensive set of national income accounts. The world had never experienced anything like the Great Depression before: policy makers were sailing into a global storm without a map to guide them. At first they didn’t know how bad it was going to get.

The engines of America’s great prosperity machine are no longer firing as effectively as they once did. Growth in nonfarm business output per hour from 2011 to 2016 has averaged a scant 0.7 percent annually, and real GDP growth only 2.2 percent annually. Moreover, stagnation is producing a populist backlash that threatens to clog up those engines even more. Simon Kuznets once remarked, “We Americans are so used to sustained economic growth in per capita product that we tend to take it for granted—not realizing how exceptional growth of this magnitude is on the scale of human history.” People usually respond very poorly to losing something they take for granted: first they deny they’ve lost it, continuing to spend the proceeds of prosperity as if nothing has changed, and then they start ranting and raving.


Phil Thornton by The Great Economists Ten Economists whose thinking changed the way we live-FT Publishing International (2014)

Alan Greenspan, availability heuristic, behavioural economics, Berlin Wall, bitcoin, Bretton Woods, British Empire, business cycle, business process, call centre, capital controls, Cass Sunstein, choice architecture, cognitive bias, collapse of Lehman Brothers, Corn Laws, creative destruction, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, double helix, endogenous growth, endowment effect, Eugene Fama: efficient market hypothesis, Fall of the Berlin Wall, fiat currency, financial deregulation, fixed income, Ford Model T, full employment, hindsight bias, income inequality, inflation targeting, invisible hand, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Kenneth Arrow, Kenneth Rogoff, Kickstarter, liquidity trap, loss aversion, mass immigration, means of production, mental accounting, Myron Scholes, paradox of thrift, Pareto efficiency, Paul Samuelson, Post-Keynesian economics, price mechanism, pushing on a string, quantitative easing, Richard Thaler, road to serfdom, Ronald Coase, Ronald Reagan, school vouchers, Simon Kuznets, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Malthus, Toyota Production System, trade route, transaction costs, unorthodox policies, Vilfredo Pareto, women in the workforce

The permanent income hypothesis Friedman’s contribution to economics began, not with the high-minded world of finance ministers and central banks, but in the milieu of doctors and dentists. After his work on the New Deal, Friedman got a job at the National Bureau of Economic Research, where he assisted Simon Kuznets – who later won the Nobel for his work on the idea of gross national product – in his studies of professional income. They concluded that the medical profession’s monopoly powers had raised substantially the incomes of doctors relative to those of dentists – indeed, publication of the work, that was completed in 1940, was delayed until after the Second World War because of the controversy it created within the Chapter 7 • Milton Friedman149 bureau.

Roosevelt) 148 New Keynesianism 159, 163 New Neoclassical Synthesis 111 Nicholas I, Tsar 52 NINJA (No Income, No Job, No Assets) homebuyers 61–2 Nixon, Richard 109, 146 Nobel laureates Kenneth Arrow (1972) 191, 213 Gary Becker (1992) 194, 195–6 Ronald Coase (1991) 73 Peter Diamond (2010) 179 Eugene Fama (2013) 160, 187 Milton Friedman (1976) 146, 147–8, 154, 161 Lars Peter Hansen (2013) 160 Friedrich Hayek (1974) 137 Daniel Kahneman (2002) 218, 220 Paul Krugman (2008) 180, 191 Simon Kuznets (1971) 148 Robert Lucas (1995) 202 Robert Merton (1997) 187 Edmund Phelps (2006) 213 Paul Samuelson (1970) 168 Myron Scholes (1997) 187 Vernon Smith (2002) 218 non-accelerating inflation of unemployment (NAIRU) 153–5 Nordhaus, William 171, 178 North American Free Trade Agreement 41, 187 North, Lord 23 Obama, Barack 162, 190 offshoring of jobs 41 OPEC 22 opportunity cost concept 201, 205 optimism bias and overconfidence 226–7 outsourcing 21 overlapping generations (OLG) model 178–80 Pareto, Vilfredo 182 Pareto efficiency 182 pensions and pension funds 178 permanent income hypothesis (Friedman) 148–50 Perot, Ross 41 Phelps, Edmund 154, 213 Philip, Prince 158 Pigou, A.C. 95 Pinochet, Augusto 161 political economy 28, 74, 93 population growth theories Malthus 31 Ricardo 31, 32–3 Posner, Richard 215 Predictably Irrational (Ariely, 2009) 234 prejudice economic perspective of Becker 196–7, 198–9 views of Friedman 157 price, as interaction of supply and demand (Marshall) 75–9 prices and knowledge (Hayek) 131–3 Prices and Production (Hayek, 1931) 126, 130 Principles of Economics (Marshall, 1890) 72, 76, 77–8, 87–8, 188 private savings, influence of taxation policy 43–4 private sector windfalls, impact of stimulus measures 43–4 privatisation of state-owned monopolies 21 246Index productivity, and division of labour 11–14 Prospect Theory (Kahneman) 228–32, 234 protectionism 22–3, 33–5, 41–2, 185 public goods economics 175–8 purchasing price parity (PPP) measures 186 quantitative easing 162, 163 quantity theory of money, criticism by Keynes 97 Rae, John 23 rational choice model (Becker) 197, 212–15, 216 challenge from Kahneman 221–33 rational expectations hypothesis 111, 137 Reagan, Ronald 19, 20, 139, 146, 158, 160 recession drivers of (Keynes) 101 see also Great Recession (2009) reflection effect 229 revealed preference theory 180–1 reverse elasticity 84 Ricardo, Abraham 28–9 Ricardo, David (1772–1823) 27–46, 183 attack on the Corn Laws 33–5 early life and influences 28–30 from finance to economics 30–1 global free trade 40–2 government debt 38–9 influence of Adam Smith 30 international trade and comparative advantage 35–8 key ideas 46 long-term legacy 40–4 on the general workings of the economy 31–3 on wealth creation and distribution 31–3 political career 30 population growth theories 31, 32–3 The Principles of Political Economy and Taxation (1817) 28, 31–3, 188 Ricardian equivalence 38–9 Ricardo effect 33 verdict 45–6 wine and cloth example 35, 37, 40–1 Ricardian equivalence 38–9 Ricardo effect 33 Robbins, Lionel 122, 129 Rogeberg, Ole 211 Rogoff, Kenneth 189–90 Roosevelt, Franklin D. 148 Samuelson, Paul (1915–2009) 37, 106, 137, 159, 167–92 autarky concept 184 early life and influences 169–70 economics in action 190–1 Economics: An Introductory Analysis (1948) 168, 171–3, 188–9 efficient markets 187 ethical judgements in economics 182–3 explaining trade imbalances 184–5 factor price equalisation theorem 186–7 financial economics 187 Foundations of Economic Analysis (1947) 168, 169–70 global public goods 177–8 influence of Keynes 171–2 influence on economic theory 189–90 intergenerational economics 178–80 international economics and trade 183–7 key economic theories and writings 171–87 long-term legacy 188–91 mathematical approach to economic issues 169–70 microeconomic market system 172–3, 174 multiplier effect 174–5 Index247 neoclassical synthesis 174 neo-Keynesianism 168–9, 173–5 Nobel Prize in economic sciences (1970) 168 oscillator model of business cycles 174–5 overlapping generations (OLG) model 178–80 public goods and public finance 175–8 public goods economics 175–8 revealed preference theory 180–1 understanding consumer behaviour 180–1 verdict 191–2 warrant pricing 187 welfare economics 181–3 Scholes, Myron 187 Schwartz, Anna 150–1, 162 Scottish Enlightenment 3 Second World War 95, 96 self-interest theory of Adam Smith 2–3, 6, 8–9, 20 Skidelsky, Robert 114, 128 slavery 10–11 Smith, Adam (1723–90) 1–25, 97, 230–1 A Theory of Moral Sentiments (1759) 2, 5–6 division of labour and productivity 11–14 drivers of rates of pay 12–13 early life and character 3–5 free-market mechanism of supply and demand 8–9 free international trade 13–14 from philosophy to economics 6–7 functions funded by general taxation 16 functions of the state 16–18 functions that users should pay for 16–17 idea of ‘natural liberty’ 8 idea of ‘sympathy’ of people for each other 6 key ideas 25 long-term legacy 19–23 market price of a commodity 15–16 on slavery 10–11 personal legacy 23 pin factory example 11–13 role of the state in the economy 9, 10 self-interest theory 2–3, 6, 8–9, 20 taxation principles 17–18 the evil of cartels and monopolies 10–11 the invisible hand 7–9 the market mechanism 15–16 The Wealth of Nations (1776) 2–3, 6, 7–25, 188 verdict 23–4 Smith, Vernon 218 Smoot-Hawley Tariff Act (US) 42 social security systems 179 social welfare function 182–3 socialism 134–6 sovereign debt crisis in Greece 113–14 Soviet Union, collapse of 140, 158 Sraffa, Piero 130–1 stagflation in the 1970s 154, 173–4 Standard Oil Company of New Jersey 21 state-owned monopolies, privatisation programmes 21 Statecraft (Thatcher, 2002) 19 status quo bias 227–8 stimulus measures, debate over effects of 43–4 stimulus versus austerity debate 43–4, 140–1 Stockholm School of Economics 168 Stolper, Wolfgang 184–5 Stolper–Samuelson theorem 184–5 Strachey, Lytton 94 structural unemployment 155 substitution effect, response to price change 82, 83 Summers, Anita 190 Summers, Lawrence 190 Summers, Robert 190 Sunstein, Cass 234 248Index supply and demand market mechanism 8–9, 15–16, 75–84 supply side economics 127, 201 surplus value of labour (Marx) 54–6 taxation policy influence on private savings 43–4 views of Adam Smith 16–18 taxpayers, view of government debt (Ricardo) 38–9 Thaler, Richard 232, 234, 235 Thatcher, Margaret 19, 138–9, 155, 160–1 The General Theory of Employment, Interest and Money (Keynes, 1936) 99–106 The Principles of Political Economy (Mill, 1848) 188 The Principles of Political Economy and Taxation (Ricardo, 1817) 28, 31–3, 188 The Road to Serfdom (Hayek, 1944) 135, 138, 140 The Wealth of Nations (Smith, 1776) 2–3, 6, 7–25, 188 Thinking, Fast and Slow (Kahneman, 2012) 226–7, 234 time factor and the value of capital (Hayek) 124–6 in the supply and demand model 77–9 Townshend, Charles 5, 6–7 Toyota, production systems 21 trade barriers 22–3, 41–2, 185 Corn Laws 33–5 trade imbalances, Samuelson’s explanation 184–5 trade unions 19 transient income concept 149 Treatise on Human Nature (Hume) 4 Treaty of Versailles 95–6 Tversky, Amos 218, 220, 221–5, 228–33, 235 Ulam, Stanislaw 37 uncertainty and investment volatility 104–5 unemployment causes of (Keynes) 101 frictional 155 ‘natural’ rate of (Friedman) 153–5 relationship with inflation 153–5 structural 155 United States housing market crisis (2008) 61–2, 112 import tariffs after the Wall Street Crash 42 savings and investment imbalance with China 113 trade imbalance with China 45 US Federal Reserve 111–12 action to control inflation 161 and the 2008 financial crisis 235 influence of monetary policy 159 money supply and the Great Depression (1930s) 150–2 quantitative easing (2009 onward) 162 role in the Great Depression (1930s) 159 utilitarianism 31, 182 value and costs of production 75–7 distribution of economic value (Marx) 54–6 surplus value of labour (Marx) 54–6 Voltaire 7 wages drivers of wage rates (Smith) 12–13 effects of reducing (Keynes) 101–2 relationship to rents and profits 32–3 surplus value of labour (Marx) 54–6 Wall Street Crash (1929) 23, 42 Wallich, Henry 190–1 warrant pricing (Samuelson) 187 wealth creation and distribution, view of Ricardo 31–3 Index249 welfare economics 181–3 White, Harry Dexter 108 Wilberforce, William 10 Wittgenstein, Ludwig 121 women in the workforce 202 Wood, Kingsley 106 Woolf, Leonard 94 World Bank Group 109 World Trade Organization (WTO) 22, 40–1, 185


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Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist by Kate Raworth

"Friedman doctrine" OR "shareholder theory", 3D printing, Alan Greenspan, Alvin Toffler, Anthropocene, Asian financial crisis, bank run, basic income, battle of ideas, behavioural economics, benefit corporation, Berlin Wall, biodiversity loss, bitcoin, blockchain, Branko Milanovic, Bretton Woods, Buckminster Fuller, business cycle, call centre, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Cass Sunstein, choice architecture, circular economy, clean water, cognitive bias, collapse of Lehman Brothers, complexity theory, creative destruction, crowdsourcing, cryptocurrency, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, degrowth, dematerialisation, disruptive innovation, Douglas Engelbart, Douglas Engelbart, Easter island, en.wikipedia.org, energy transition, Erik Brynjolfsson, Ethereum, ethereum blockchain, Eugene Fama: efficient market hypothesis, experimental economics, Exxon Valdez, Fall of the Berlin Wall, financial deregulation, Financial Instability Hypothesis, full employment, Future Shock, Garrett Hardin, Glass-Steagall Act, global supply chain, global village, Henri Poincaré, hiring and firing, Howard Zinn, Hyman Minsky, income inequality, Intergovernmental Panel on Climate Change (IPCC), invention of writing, invisible hand, Isaac Newton, it is difficult to get a man to understand something, when his salary depends on his not understanding it, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, Kickstarter, land reform, land value tax, Landlord’s Game, loss aversion, low interest rates, low skilled workers, M-Pesa, Mahatma Gandhi, market fundamentalism, Martin Wolf, means of production, megacity, Minsky moment, mobile money, Money creation, Mont Pelerin Society, Myron Scholes, neoliberal agenda, Network effects, Occupy movement, ocean acidification, off grid, offshore financial centre, oil shale / tar sands, out of africa, Paul Samuelson, peer-to-peer, planetary scale, price mechanism, quantitative easing, randomized controlled trial, retail therapy, Richard Thaler, Robert Solow, Ronald Reagan, Second Machine Age, secular stagnation, shareholder value, sharing economy, Silicon Valley, Simon Kuznets, smart cities, smart meter, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, statistical model, Steve Ballmer, systems thinking, TED Talk, The Chicago School, The Great Moderation, the map is not the territory, the market place, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, too big to fail, Torches of Freedom, Tragedy of the Commons, trickle-down economics, ultimatum game, universal basic income, Upton Sinclair, Vilfredo Pareto, wikimedia commons

His list got longer but the questions never aimed higher, to encourage the students to consider the economy’s purpose. How had the GDP growth cuckoo so successfully hijacked the economic nest? The answer can be traced back to the mid 1930s – as economists were just settling upon a goalless definition of their discipline – when the US Congress first commissioned economist Simon Kuznets to devise a measure of America’s national income. The calculation he made came to be known as Gross National Product, and was based on the income generated worldwide by the nation’s residents. For the first time, thanks to Kuznets, it became possible to put a dollar value on America’s annual output and hence its income – and to compare it to the year before.

What’s more, he argued, the steep ‘social pyramid’ that his data had repeatedly revealed must be a fixed fact of human nature, making attempts at redistribution counterproductive. The way to help the worst off was to expand the economy, he concluded, and the wealthy were best placed to make that happen.4 Converging, diverging, or ever-fixed? Debates over the likely path of income inequality raged on, but in 1955 the story took a crucial turn, quite literally. When Simon Kuznets – the brilliant inventor of national income accounting – gathered together long-run trend data on incomes in the US, UK and Germany, he was taken aback by what he found. In all three countries, income inequality measured before tax had been falling at least since the 1920s, and even possibly before the First World War.

Persky, J. (1992) ‘Retrospectives: Pareto’s law’, Journal of Economic Perspectives 6: 2, pp. 181–192. 5. Kuznets, S. (1955) ‘Economic growth and income inequality’, American Economic Review, 45: 1, pp. 1–28. 6. Kuznets, S. (1954) Letter to Selma Goldsmith, US Office of Business Economics, 15 August 1954, Papers of Simon Kuznets, Harvard University Archives, HUGFP88.10 Misc. Correspondence, Box 4. http://asociologist.com/2013/03/21/on-the-origins-of-the-kuznets-curve/ 7. Kuznets, S. (1955) ‘Economic growth and income inequality’, American Economic Review, 45: 1, pp. 1–28. 8. Lewis, W. A. (1976) ‘Development and distribution’, in Cairncross, A. and Puri, M.


pages: 242 words: 68,019

Why Information Grows: The Evolution of Order, From Atoms to Economies by Cesar Hidalgo

Ada Lovelace, Albert Einstein, Arthur Eddington, assortative mating, business cycle, Claude Shannon: information theory, David Ricardo: comparative advantage, Douglas Hofstadter, Everything should be made as simple as possible, Ford Model T, frictionless, frictionless market, George Akerlof, Gödel, Escher, Bach, income inequality, income per capita, industrial cluster, information asymmetry, invention of the telegraph, invisible hand, Isaac Newton, James Watt: steam engine, Jane Jacobs, job satisfaction, John von Neumann, Joi Ito, New Economic Geography, Norbert Wiener, p-value, Paul Samuelson, phenotype, price mechanism, Richard Florida, Robert Solow, Ronald Coase, Rubik’s Cube, seminal paper, Silicon Valley, Simon Kuznets, Skype, statistical model, Steve Jobs, Steve Wozniak, Steven Pinker, Stuart Kauffman, tacit knowledge, The Market for Lemons, The Nature of the Firm, The Wealth of Nations by Adam Smith, total factor productivity, transaction costs, working-age population

They also modeled economic growth as the tug-of-war between an economy’s savings rate (the capital that it keeps for later use) and capital depreciation (the wear and tear that erodes capital). Robert Solow advanced the prototypical model of economic growth in the 1950s—a timely development, as the data needed to evaluate such models were just becoming available. Simon Kuznets, the Russian-born economist who fathered GDP, had finished creating the system of national accounts a couple of decades earlier, helping generate the economic metric that dominated the twentieth century.4 Solow’s model, however, did not measure up well when it was compared with empirical data.

Gross domestic product (GDP) displaced GNP as the official metric in the 1990s. GDP considers the production of goods and services within a country. GNP considers the goods and services produced by the citizens of a country, whether or not those goods are produced within the boundaries of the country. 5. Simon Kuznets, “Modern Economic Growth: Findings and Reflections,” American Economic Review 63, no. 3 (1973): 247–258. 6. Technically, total factor productivity is the residual or error term of the statistical model. Also, economists often refer to total factor productivity as technology, although this is a semantic deformation that is orthogonal to the definition of technology used by anyone who has ever developed a technology.


pages: 409 words: 125,611

The Great Divide: Unequal Societies and What We Can Do About Them by Joseph E. Stiglitz

"World Economic Forum" Davos, accelerated depreciation, accounting loophole / creative accounting, affirmative action, Affordable Care Act / Obamacare, agricultural Revolution, Alan Greenspan, Asian financial crisis, banking crisis, Bear Stearns, Berlin Wall, Bernie Madoff, Branko Milanovic, Bretton Woods, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Carmen Reinhart, carried interest, classic study, clean water, collapse of Lehman Brothers, collective bargaining, company town, computer age, corporate governance, credit crunch, Credit Default Swap, deindustrialization, Detroit bankruptcy, discovery of DNA, Doha Development Round, everywhere but in the productivity statistics, Fall of the Berlin Wall, financial deregulation, financial innovation, full employment, gentrification, George Akerlof, ghettoisation, Gini coefficient, glass ceiling, Glass-Steagall Act, global macro, global supply chain, Home mortgage interest deduction, housing crisis, income inequality, income per capita, information asymmetry, job automation, Kenneth Rogoff, Kickstarter, labor-force participation, light touch regulation, Long Term Capital Management, low interest rates, manufacturing employment, market fundamentalism, mass incarceration, moral hazard, mortgage debt, mortgage tax deduction, new economy, obamacare, offshore financial centre, oil shale / tar sands, Paul Samuelson, plutocrats, purchasing power parity, quantitative easing, race to the bottom, rent-seeking, rising living standards, Robert Solow, Ronald Reagan, Savings and loan crisis, school vouchers, secular stagnation, Silicon Valley, Simon Kuznets, subprime mortgage crisis, The Chicago School, the payments system, Tim Cook: Apple, too big to fail, trade liberalization, transaction costs, transfer pricing, trickle-down economics, Turing machine, unpaid internship, upwardly mobile, urban renewal, urban sprawl, very high income, War on Poverty, Washington Consensus, We are the 99%, white flight, winner-take-all economy, working poor, working-age population

The 99 percent’s boat was sinking, or at least not doing very well. Meanwhile, the other ship was sailing magnificently. Piketty showed that the United States was not alone: similar patterns could be seen elsewhere. Economists had misinterpreted what was happening in the aftermath of World War II. Simon Kuznets, one of the founders of our system of national accounts (by which we measure the size of the economy), who received a Nobel Prize in 1971, had suggested that after an initial period of growth, in which there was an increase in inequality, as economies became richer they became more equal. Experiences since 1980 have showed that this was not true.

Now comes Thomas Piketty, who warns us in his justly celebrated new book, Capital in the Twenty-first Century, that matters are only likely to get worse. Above all, he argues that the natural state of capitalism seems to be one of great inequality. When I was a graduate student, we were taught the opposite. The economist Simon Kuznets optimistically wrote that after an initial period of development in which inequality grew, it would begin to decline. Although data at the time were scarce, it might have been true when he wrote it: The inequalities of the 19th and early 20th centuries seemed to be diminishing. This conclusion appeared to be vindicated during the period from World War II to 1980, when the fortunes of the wealthy and the middle class rose together.

In the initial stages of development, some parts of the country start to grow more than others. Almost always, development is about industrialization and urbanization; with urban incomes so much higher than those in the rural areas, early on inequality grows. But as the rural sector diminishes in importance, inequality diminishes. That’s one of the reasons that Simon Kuznets had anticipated that the widely observed increases in inequality in early stages of development would be reversed. China is so far no exception to this pattern. The United States (and increasingly other advanced countries) are. The diminution of inequality did mark the United States in the first three-fourths of the last century, but beginning with the Reagan era, matters reversed.


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Common Wealth: Economics for a Crowded Planet by Jeffrey Sachs

agricultural Revolution, air freight, Anthropocene, back-to-the-land, biodiversity loss, British Empire, business process, carbon credits, carbon footprint, carbon tax, clean water, colonial rule, corporate social responsibility, correlation does not imply causation, creative destruction, demographic transition, Diane Coyle, digital divide, Edward Glaeser, energy security, failed state, Garrett Hardin, Gini coefficient, global pandemic, Global Witness, Haber-Bosch Process, impact investing, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), intermodal, invention of agriculture, invention of the steam engine, invisible hand, Joseph Schumpeter, knowledge worker, labor-force participation, low skilled workers, mass immigration, microcredit, ocean acidification, oil shale / tar sands, old age dependency ratio, peak oil, profit maximization, profit motive, purchasing power parity, road to serfdom, Ronald Reagan, Simon Kuznets, Skype, statistical model, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, Tragedy of the Commons, transaction costs, unemployed young men, War on Poverty, women in the workforce, working-age population, zoonotic diseases

The Encyclopedia of Life could have one expandable Web page per species, documenting all known aspects of the species: genomics, cladistics and evolution, behavior, range, abundance, ecological relations with other species, threats to survival, and so forth. CHAPTER 7: GLOBAL POPULATION DYNAMICS 159 “There doesn’t seem ”: “How to Deal with a Falling Population” The Economist 284, no. 8539 (July 28, 2007): 11. 160 Simon Kuznets and Michael Kremer: Michael Kremer, “Population Growth and Technological Change: One Million B.C. to 1990,” The Quarterly Journal of Economics 108, no. 3 (August 1993): 681–716; Simon Kuznets, “Population Change and Aggregate Output,” Demographic and Economic Change in Developed Countries (Princeton, NJ: Princeton University Press, 1960): 324–40. 177 The standard tests have: Robert J. Barro and Xavier Sala-i-Martin, Economic Growth, 2nd edition (Cambridge, Mass.: MIT Press, 2004). 177 each country’s average annual growth rate: Initial income is expected to have a negative effect: richer countries should grow less rapidly, and poor countries more rapidly, because of the phenomenon of convergence.

THE DEBATE OVER POPULATION Economists tend to be divided into three camps: population optimists, who say that today’s population growth is good for development or is at least neutral; population pessimists, who say that population growth has already gone too far to avoid disaster; and those (including myself) who believe in the importance of spurring the demographic transition to lower fertility rates in the poorest countries. Population optimists maintain that there are no real bounds to the Earth’s population because technology can and will keep ahead of the curve. One variant of this optimism is associated with the ideas of economists Simon Kuznets and Michael Kremer, who have each argued that a larger global population will tend to bring about the very technological advances that are needed to sustain that larger population. From their viewpoint, an important part of economic advance comes from the scientific and technological discoveries of geniuses in society.


pages: 233 words: 75,712

In Defense of Global Capitalism by Johan Norberg

anti-globalists, Asian financial crisis, capital controls, clean water, correlation does not imply causation, creative destruction, Deng Xiaoping, Edward Glaeser, export processing zone, Gini coefficient, Great Leap Forward, half of the world's population has never made a phone call, Hernando de Soto, illegal immigration, income inequality, income per capita, informal economy, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", Joseph Schumpeter, Kenneth Rogoff, land reform, Lao Tzu, liberal capitalism, market fundamentalism, Mexican peso crisis / tequila crisis, Naomi Klein, new economy, open economy, prediction markets, profit motive, race to the bottom, rising living standards, Silicon Valley, Simon Kuznets, structural adjustment programs, The Wealth of Nations by Adam Smith, Tobin tax, trade liberalization, trade route, transaction costs, trickle-down economics, Tyler Cowen, union organizing, zero-sum game

This is corroborated by the fact that the connection between inequality and growth is quite clear in nondemocratic states, but not apparent in modern, liberal ones.13 But can the opposite effect also hold? Is it true that increased growth leads to greater inequality, as is widely maintained? Economists sometimes refer to ‘‘Kuznets’s inverted U-curve,’’ which is based on a 1955 article by the economist Simon Kuznets, who argued that economic growth in a society initially leads to greater inequality and only after some time to a reduction of inequality. Many have accepted this thesis as truth, and it is sometimes used to discredit the idea of growth, or at least to demand redistributive policies. Kuznets himself did not draw any such drastic conclusions.

Olinto, Asset Distribution, Inequality, and Growth, World Bank Policy Research Paper no. 2375 (Washington: World Bank, 2000). For the connection with democracy, see Klaus Deininger and Lyn Squire, ‘‘New Ways of Looking at the Old Issues: Asset Inequality and Growth,’’ Journal of Development Economics 57 (1998): 259–87. 14. Simon Kuznets, ‘‘Economic Growth and Income Inequality,’’ American Economic Review 45 (March 1955): 26. 15. World Bank, Income Poverty: Trends in Inequality (Washington: World Bank, 2000), http://www.worldbank.org/poverty/data/trends/inequal.htm. The data refuting Kuznets are presented in Deininger and Squire, pp. 259–287.


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Big Three in Economics: Adam Smith, Karl Marx, and John Maynard Keynes by Mark Skousen

Albert Einstein, banking crisis, behavioural economics, Berlin Wall, Bretton Woods, business climate, business cycle, creative destruction, David Ricardo: comparative advantage, delayed gratification, experimental economics, financial independence, Financial Instability Hypothesis, foreign exchange controls, full employment, Hernando de Soto, housing crisis, Hyman Minsky, inflation targeting, invisible hand, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kenneth Arrow, laissez-faire capitalism, liberation theology, liquidity trap, low interest rates, means of production, Meghnad Desai, microcredit, minimum wage unemployment, money market fund, open economy, paradox of thrift, Pareto efficiency, Paul Samuelson, Phillips curve, Post-Keynesian economics, price stability, pushing on a string, rent control, Richard Thaler, rising living standards, road to serfdom, Robert Shiller, Robert Solow, rolodex, Ronald Coase, Ronald Reagan, school choice, secular stagnation, Simon Kuznets, The Chicago School, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, Tobin tax, Tragedy of the Commons, unorthodox policies, Vilfredo Pareto, zero-sum game

Keynes defined effective demand as aggregate output (Y), which is the sum of consumption (C) and investment (I). Hence, Y= C +1 Today we refer to Y or "aggregate effective demand," as gross domestic product (GDP). GDP is defined as the value of final output of goods and services during the year. Simon Kuznets, a Keynesian statistician, developed national income accounting in the early 1940s as a way to measure Keynes's aggregate effective demand. Keynes effectively demonstrated 10. Foster and Catchings rejected all arguments and never paid the prize money. that if savings are not invested by business, GDP does not reach its potential; recession or depression indicates a lack of effective demand.

How did Friedman almost single-handedly change the intellectual climate back from the Keynesian model to the neoclassical model of Adam Smith? After acquiring academic credentials, he focused on scholarly technical work, particularly empirical evidence to test the Keynesian model. He learned the importance of sophisticated quantitative analysis from Simon Kuznets, Wesley Mitchell, and other stars at the National Bureau of Economic Research. Friedman started teaching at Chicago in 1946, where he stayed until his official retirement in 1977. Following Frank Knight's retirement in 1955, Friedman continued the Chicago tradition and even strengthened it with an upgraded version of Irving Fisher's quantity theory of money, which he applied to monetary policy.


pages: 290 words: 76,216

What's Wrong With Economics: A Primer for the Perplexed by Robert Skidelsky

additive manufacturing, agricultural Revolution, behavioural economics, Black Swan, Bretton Woods, business cycle, carbon tax, Cass Sunstein, central bank independence, cognitive bias, conceptual framework, Corn Laws, corporate social responsibility, correlation does not imply causation, creative destruction, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, degrowth, disruptive innovation, Donald Trump, Dr. Strangelove, full employment, George Akerlof, George Santayana, global supply chain, global village, Gunnar Myrdal, happiness index / gross national happiness, hindsight bias, Hyman Minsky, income inequality, index fund, inflation targeting, information asymmetry, Internet Archive, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Arrow, knowledge economy, labour market flexibility, loss aversion, Mahbub ul Haq, Mark Zuckerberg, market clearing, market friction, market fundamentalism, Martin Wolf, means of production, Modern Monetary Theory, moral hazard, paradox of thrift, Pareto efficiency, Paul Samuelson, Philip Mirowski, Phillips curve, precariat, price anchoring, principal–agent problem, rent-seeking, Richard Thaler, road to serfdom, Robert Shiller, Robert Solow, Ronald Coase, shareholder value, Silicon Valley, Simon Kuznets, sunk-cost fallacy, survivorship bias, technoutopianism, The Chicago School, The Market for Lemons, The Nature of the Firm, the scientific method, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, Thorstein Veblen, Tragedy of the Commons, transaction costs, transfer pricing, Vilfredo Pareto, Washington Consensus, Wolfgang Streeck, zero-sum game

Historical data join comparative data as a source for econometric studies. There has been an enormous expansion of the data base for econometrics in recent years. Examples include the many attempts to establish an empirical basis for the quantity theory of money; the long time-series developed by Simon Kuznets (1901–1985) on national income and its components to test for the consumption function; and E.F. Denison’s use of time-series to estimate relationships of key inputs (labour, capital, education, efficiency) in the growth of output.4 But as we have already argued in Chapter 5, econometrics is vastly oversold as a way of testing theories: in addition to model specification problems, as soon as you get enough observations, too much time has passed to assume conditions are stationary.

It is the sum of the annual market value of all final goods and services. But it excludes uncosted goods like volunteering, housework, and child-rearing and includes the costs of fighting crime, pollution, drug addiction, resource depletion, and so on. Even the father of national income statistics, Simon Kuznets, argued that ‘the welfare of a nation can scarcely be inferred from a measure of national income’.19 Some economists have suggested making ‘happiness’ rather than GNP the goal of policy. Everyone can agree, surely, that making people happier, in the sense of improving their psychological well-being, is a laudable goal.


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Capital in the Twenty-First Century by Thomas Piketty

accounting loophole / creative accounting, Asian financial crisis, banking crisis, banks create money, Berlin Wall, book value, Branko Milanovic, British Empire, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, carbon tax, central bank independence, centre right, circulation of elites, collapse of Lehman Brothers, conceptual framework, corporate governance, correlation coefficient, David Ricardo: comparative advantage, demographic transition, distributed generation, diversification, diversified portfolio, European colonialism, eurozone crisis, Fall of the Berlin Wall, financial intermediation, full employment, Future Shock, German hyperinflation, Gini coefficient, Great Leap Forward, high net worth, Honoré de Balzac, immigration reform, income inequality, income per capita, index card, inflation targeting, informal economy, invention of the steam engine, invisible hand, joint-stock company, Joseph Schumpeter, Kenneth Arrow, low interest rates, market bubble, means of production, meritocracy, Money creation, mortgage debt, mortgage tax deduction, new economy, New Urbanism, offshore financial centre, open economy, Paul Samuelson, pension reform, power law, purchasing power parity, race to the bottom, randomized controlled trial, refrigerator car, regulatory arbitrage, rent control, rent-seeking, Robert Gordon, Robert Solow, Ronald Reagan, Simon Kuznets, sovereign wealth fund, Steve Jobs, Suez canal 1869, Suez crisis 1956, The Nature of the Firm, the payments system, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, trade liberalization, twin studies, very high income, Vilfredo Pareto, We are the 99%, zero-sum game

To summarize: he occasionally sought to make use of the best available statistics of the day (which were better than the statistics available to Malthus and Ricardo but still quite rudimentary), but he usually did so in a rather impressionistic way and without always establishing a clear connection to his theoretical argument. 9. Simon Kuznets, “Economic Growth and Income Inequality,” American Economic Review 45, no. 1 (1955): 1–28. 10. Robert Solow, “A Contribution to the Theory of Economic Growth,” Quarterly Journal of Economics 70, no. 1 (February 1956): 65–94. 11. See Simon Kuznets, Shares of Upper Income Groups in Income and Savings (Cambridge, MA: National Bureau of Economic Research, 1953). Kuznets was an American economist, born in Ukraine in 1901, who settled in the United States in 1922 and became a professor at Harvard after studying at Columbia University.

Do the dynamics of private capital accumulation inevitably lead to the concentration of wealth in ever fewer hands, as Karl Marx believed in the nineteenth century? Or do the balancing forces of growth, competition, and technological progress lead in later stages of development to reduced inequality and greater harmony among the classes, as Simon Kuznets thought in the twentieth century? What do we really know about how wealth and income have evolved since the eighteenth century, and what lessons can we derive from that knowledge for the century now under way? These are the questions I attempt to answer in this book. Let me say at once that the answers contained herein are imperfect and incomplete.

In particular, the very high level of private wealth that has been attained since the 1980s and 1990s in the wealthy countries of Europe and in Japan, measured in years of national income, directly reflects the Marxian logic. From Marx to Kuznets, or Apocalypse to Fairy Tale Turning from the nineteenth-century analyses of Ricardo and Marx to the twentieth-century analyses of Simon Kuznets, we might say that economists’ no doubt overly developed taste for apocalyptic predictions gave way to a similarly excessive fondness for fairy tales, or at any rate happy endings. According to Kuznets’s theory, income inequality would automatically decrease in advanced phases of capitalist development, regardless of economic policy choices or other differences between countries, until eventually it stabilized at an acceptable level.


pages: 273 words: 87,159

The Vanishing Middle Class: Prejudice and Power in a Dual Economy by Peter Temin

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, affirmative action, Affordable Care Act / Obamacare, air traffic controllers' union, American Legislative Exchange Council, American Society of Civil Engineers: Report Card, anti-communist, Bernie Sanders, Branko Milanovic, Bretton Woods, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carried interest, clean water, corporate raider, Corrections Corporation of America, crack epidemic, deindustrialization, desegregation, Donald Trump, driverless car, Edward Glaeser, Ferguson, Missouri, financial innovation, financial intermediation, floating exchange rates, full employment, income inequality, independent contractor, intangible asset, invisible hand, longitudinal study, low skilled workers, low-wage service sector, mandatory minimum, manufacturing employment, Mark Zuckerberg, mass immigration, mass incarceration, means of production, mortgage debt, Network effects, New Urbanism, Nixon shock, Nixon triggered the end of the Bretton Woods system, obamacare, offshore financial centre, oil shock, plutocrats, Powell Memorandum, price stability, race to the bottom, road to serfdom, Robert Solow, Ronald Reagan, Savings and loan crisis, secular stagnation, Silicon Valley, Simon Kuznets, the scientific method, War on Poverty, Washington Consensus, white flight, working poor

He assumed that members of the capitalist sector reinvest their retained earnings. In other words, both models rely on savings, but the determinants of investment are quite different. Lewis and Solow were working within a Keynesian framework in which capital referred to the means of production: factories and machines are the prime examples. Simon Kuznets, a third Nobel Laureate in economics, also was focused on economic growth in the 1950s. Using the data available to him, he formulated what came to be called the Kuznets Curve that asserted that income inequality would first rise and then fall during economic growth. He was reacting to the declining income inequality he observed around him and a political-economic view that richer countries would choose policies that increased equality.

., and Barbara J. Fields. 2012. Racecraft: The Soul of Inequality in American Life. New York: Verso. Fitzsimmons, Emma G., and David W. Chen. 2015. “Aging Infrastructure Plagues Nation’s Busiest Rail Corridor.” New York Times, July 26. Fogel, Robert W. 1987. “Some Notes on the Scientific Methods of Simon Kuznets.” NBER Working Paper No. 2461, December. Foner, Eric. 1988. Reconstruction: America’s Unfinished Revolution, 1863–77. New York: Harper and Row. Forsberg, Mary E. 2010. “A Hudson Tunnel That Goes One Way.” New York Times, October 27. Fortner, Michael Javen. 2015. “The Real Roots of the ’70s Drug Laws.”


pages: 207 words: 86,639

The New Economics: A Bigger Picture by David Boyle, Andrew Simms

Abraham Maslow, Alan Greenspan, Alvin Toffler, Apollo 11, Asian financial crisis, back-to-the-land, banking crisis, behavioural economics, Bernie Madoff, Big bang: deregulation of the City of London, Bonfire of the Vanities, Bretton Woods, capital controls, carbon footprint, carbon tax, clean water, collateralized debt obligation, colonial rule, Community Supported Agriculture, congestion charging, corporate raider, corporate social responsibility, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, Crossrail, delayed gratification, deskilling, digital divide, en.wikipedia.org, energy transition, financial deregulation, financial exclusion, financial innovation, full employment, garden city movement, Glass-Steagall Act, green new deal, happiness index / gross national happiness, if you build it, they will come, income inequality, informal economy, Intergovernmental Panel on Climate Change (IPCC), Jane Jacobs, John Elkington, junk bonds, Kickstarter, land bank, land reform, light touch regulation, loss aversion, mega-rich, microcredit, Mikhail Gorbachev, Money creation, mortgage debt, neoliberal agenda, new economy, North Sea oil, Northern Rock, offshore financial centre, oil shock, peak oil, pension time bomb, pensions crisis, profit motive, purchasing power parity, quantitative easing, Ronald Reagan, seigniorage, Simon Kuznets, sovereign wealth fund, special drawing rights, systems thinking, the long tail, The Wealth of Nations by Adam Smith, Thomas L Friedman, too big to fail, trickle-down economics, Vilfredo Pareto, Washington Consensus, wealth creators, working-age population

We will build roads and railways, develop atomic power and help with the re-equipment and modernization of the whole of industry.’ WHY DID AN APPARENTLY POOR PACIFIC ISLAND HIT THE TOP? 37 In fact, the idea of GDP dated back further than 1954, to the battle to rescue the world from the Great Depression, and then from Hitler. It was developed by some of the young economists around Keynes and Simon Kuznets in the USA as a way of working out the total productive power of the economy, a by-product of those techniques of investment that allowed Britain to out-produce Nazi Germany. Once the war was over, this seemed to provide the perfect scorecard for an impoverished nation: measure national success by the total amount of money that changed hands, and nothing else.

She wrote a paper for the Women and Food conference in Sydney in 1982, and submitted it for comment to Australia’s deputy chief statistician. ‘His memo of reply to me – a classic of sexist economic assumptions – was one of the major incentives to write this book,’ she wrote in the introduction. WHY DID AN APPARENTLY POOR PACIFIC ISLAND HIT THE TOP? 39 She also discovered the lists of students who worked under the economist Simon Kuznets (who originally warned against over-reliance on growth as a measure) in the 1930s to develop national accounting in the first place, before it had become the theory of economic growth. The names were all men, but at the bottom was an important note: ‘Five clerks, all women with substantial experience and know-how, assisted importantly in this work.’


pages: 561 words: 87,892

Losing Control: The Emerging Threats to Western Prosperity by Stephen D. King

"World Economic Forum" Davos, Admiral Zheng, Alan Greenspan, asset-backed security, barriers to entry, Berlin Wall, Bernie Madoff, Bretton Woods, BRICs, British Empire, business cycle, capital controls, Celtic Tiger, central bank independence, collateralized debt obligation, corporate governance, credit crunch, crony capitalism, currency manipulation / currency intervention, currency peg, David Ricardo: comparative advantage, demographic dividend, demographic transition, Deng Xiaoping, Diane Coyle, Fall of the Berlin Wall, financial deregulation, financial innovation, fixed income, foreign exchange controls, Francis Fukuyama: the end of history, full employment, G4S, George Akerlof, German hyperinflation, Gini coefficient, Great Leap Forward, guns versus butter model, hiring and firing, income inequality, income per capita, inflation targeting, invisible hand, Isaac Newton, junk bonds, knowledge economy, labour market flexibility, labour mobility, liberal capitalism, low interest rates, low skilled workers, market clearing, Martin Wolf, mass immigration, Meghnad Desai, Mexican peso crisis / tequila crisis, Naomi Klein, new economy, old age dependency ratio, Paul Samuelson, Ponzi scheme, price mechanism, price stability, purchasing power parity, rent-seeking, reserve currency, rising living standards, Ronald Reagan, Savings and loan crisis, savings glut, Silicon Valley, Simon Kuznets, sovereign wealth fund, spice trade, statistical model, technology bubble, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Market for Lemons, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, transaction costs, Washington Consensus, We are all Keynesians now, women in the workforce, working-age population, Y2K, Yom Kippur War

THE EMERGING GAP As we have seen, growing income inequality is not confined to parts of the developed world. China has witnessed a widening gap between a growing middle class and the majority of people who still remain wrapped in poverty. Other emerging economies have also seen a growing divide between rich and poor.11 These developments are consistent with the thoughts of Simon Kuznets (1901–85), arguably the father of modern national accounts, who described the changes in the distribution of income as economies shifted from agrarian to urban societies.12 The argument is straightforward. Urban workers are more productive than their inefficient rural counterparts. As urban development lifts off, so the nation as a whole becomes more productive.

Francis Jones, Daniel Annan and Saef Shah, ‘The distribution of household income 1977 to 2006/07’, Office for National Statistics, Economic and Labour Market Review, 2.12 (2008), pp. 18–31. 11. Some emerging economies, notably those in Latin America, have always had high levels of income inequality: political systems have allowed the middle classes to extract reasonable incomes even though rates of economic growth have often been poor. 12. Simon Kuznets, ‘Toward a theory of economic growth’. in Robert Lekachman, National Policy for Economic Welfare at Home and Abroad (Doubleday, Garden City, NY, 1955). 13. Source: UN Food and Agriculture Organization. 14. Source: Prabhu Pingali, Westernization of Asian Diets and the Transformation of Food Systems: Implications for Research and Policy, ESA Working Paper No. 04–17, Rome, September 2004. 15.


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Less Is More: How Degrowth Will Save the World by Jason Hickel

air freight, Airbnb, Anthropocene, basic income, Bernie Sanders, Big bang: deregulation of the City of London, biodiversity loss, Boris Johnson, Bretton Woods, British Empire, capital controls, circular economy, cognitive dissonance, coronavirus, corporate governance, corporate personhood, cotton gin, COVID-19, David Graeber, decarbonisation, declining real wages, degrowth, deindustrialization, dematerialisation, disinformation, Elon Musk, energy transition, Extinction Rebellion, extractivism, Fairphone, Fellow of the Royal Society, flying shuttle, Fractional reserve banking, Francis Fukuyama: the end of history, full employment, gender pay gap, green new deal, Greta Thunberg, income inequality, Intergovernmental Panel on Climate Change (IPCC), invention of the steam engine, James Watt: steam engine, Jeff Bezos, Jevons paradox, John Maynard Keynes: Economic Possibilities for our Grandchildren, land reform, liberal capitalism, lockdown, longitudinal study, low interest rates, Mahatma Gandhi, Mark Zuckerberg, McMansion, means of production, meta-analysis, microbiome, Money creation, moral hazard, mortgage debt, Murray Bookchin, Naomi Klein, negative emissions, new economy, ocean acidification, offshore financial centre, oil shale / tar sands, opioid epidemic / opioid crisis, out of africa, passive income, planetary scale, planned obsolescence, plutocrats, Post-Keynesian economics, quantitative easing, rent control, rent-seeking, retail therapy, Ronald Reagan, Rupert Read, Scramble for Africa, secular stagnation, shareholder value, sharing economy, Simon Kuznets, structural adjustment programs, the scientific method, The Spirit Level, transatlantic slave trade, trickle-down economics, universal basic income

But beginning in the early 1930s, during the Great Depression, something happened that added real fuel to these flames. The Depression devastated the economies of the United States and Western Europe, and governments found themselves scrambling for a response. In the United States, officials reached out to the economist Simon Kuznets and asked him to develop an accounting system that would reveal the monetary value of all the goods and services produced in the economy. The idea was that if you can see what is happening in the economy more clearly, you can figure out where things are going wrong and intervene more effectively.

Over and over again, it turns out that the dominant belief in the necessity of growth is under-justified. Those who call for continued growth at the expense of ecological stability are ready to risk everything – literally – for the sake of something we don’t really even need. We need new indicators of progress – but that’s not enough When Simon Kuznets introduced the GDP metric to the US Congress back in the 1930s, he was careful to warn that it should never be used as a normal measure of economic progress. Focusing on GDP would incentivise too much destruction. ‘The welfare of a nation can scarcely be inferred from a measure of national income,’ Kuznets said.


pages: 298 words: 95,668

Milton Friedman: A Biography by Lanny Ebenstein

Abraham Wald, affirmative action, Alan Greenspan, banking crisis, Berlin Wall, Bretton Woods, business cycle, classic study, Deng Xiaoping, Fall of the Berlin Wall, fiat currency, floating exchange rates, Francis Fukuyama: the end of history, full employment, Hernando de Soto, hiring and firing, inflation targeting, invisible hand, Joseph Schumpeter, Kenneth Arrow, Lao Tzu, liquidity trap, means of production, Modern Monetary Theory, Mont Pelerin Society, Myron Scholes, Pareto efficiency, Paul Samuelson, Phillips curve, Ponzi scheme, price stability, public intellectual, rent control, road to serfdom, Robert Bork, Robert Solow, Ronald Coase, Ronald Reagan, Sam Peltzman, school choice, school vouchers, secular stagnation, Simon Kuznets, stem cell, The Chicago School, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Wealth of Nations by Adam Smith, Thorstein Veblen, zero-sum game

At the same time, his Columbia ties deepened as a result of his greater association with Mitchell and others at the National Bureau who were affiliated with the university. Friedman lectured part-time at Columbia and associated socially with many from the Columbia crowd. At the National Bureau, Friedman served as research assistant to Columbia graduate Simon Kuznets, a Mitchell disciple, who had organized the Conference on Research in National Income and Wealth. Kuznets was one of Friedman’s last mentors, along with Burns and Jones at Rutgers, Viner and Knight at Chicago, Hotelling at Columbia, and Mitchell at the National Bureau. Kuznets impressed on Friedman the value of Mitchell’s quantitative and statistical approach.

The delay was the result of unusual circumstances. Columbia at this time required that a candidate’s dissertation be published before the degree would be awarded. A major controversy arose with respect to Friedman’s dissertation, Income from Independent Professional Practices, which he co-wrote with Simon Kuznets of the National Bureau. Kuznets wrote a preliminary manuscript, which Friedman completely rewrote between 1938 and 1941. The study covers five professional fields, including doctors and dentists. The average income of physicians at this time exceeded that of dentists by about one-third. Friedman and Kuznets argued that the reason for this difference was in part that the American Medial Association (AMA) hindered entrance to the medical profession, restricting the supply of doctors and thereby driving their price up.


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The Great Convergence: Information Technology and the New Globalization by Richard Baldwin

"World Economic Forum" Davos, 3D printing, additive manufacturing, Admiral Zheng, agricultural Revolution, air freight, Amazon Mechanical Turk, Berlin Wall, bilateral investment treaty, Branko Milanovic, buy low sell high, call centre, Columbian Exchange, commoditize, commodity super cycle, David Ricardo: comparative advantage, deindustrialization, domestication of the camel, Edward Glaeser, endogenous growth, Erik Brynjolfsson, export processing zone, financial intermediation, George Gilder, global supply chain, global value chain, Henri Poincaré, imperial preference, industrial cluster, industrial robot, intangible asset, invention of agriculture, invention of the telegraph, investor state dispute settlement, Isaac Newton, Islamic Golden Age, James Dyson, Kickstarter, knowledge economy, knowledge worker, Lao Tzu, low skilled workers, market fragmentation, mass immigration, Metcalfe’s law, New Economic Geography, out of africa, paper trading, Paul Samuelson, Pax Mongolica, profit motive, rent-seeking, reshoring, Richard Florida, rising living standards, Robert Metcalfe, Robert Solow, Second Machine Age, Simon Kuznets, Skype, Snapchat, Stephen Hawking, tacit knowledge, telepresence, telerobotics, The Wealth of Nations by Adam Smith, trade liberalization, trade route, Washington Consensus

This proximity fostered innovation that triggered a dynamic of lower costs and further local concentration in the nations that started ahead (the North Atlantic economies and Japan). The flip side was a downward spiral in the ancient manufacturing consumption / production clusters. This industrialization of the North and deindustrialization of the South is one of the most striking aspects of Phase Three’s reversal of fortunes. As Simon Kuznets wrote in Economic Growth and Structure, “Before the nineteenth century and perhaps not much before it, some presently underdeveloped countries, notably China and parts of India, were believed by Europeans to be more highly developed than Europe.”4 During the eighteenth century, the Indian cotton textile industry was the global leader in terms of quality, production, and exports.

See also Bairoch, Economics and World History (London: Harvester Wheatsheaf, 1993); and Bairoch and Richard Kozul-Wright, “Globalization Myths: Some Historical Reflections on Integration, Industrialization, and Growth in the World Economy,” Discussion Paper 113, United Nations Conference on Trade and Development, Geneva, 1996. 3. The quote comes from a speech Bismarck gave in 1879 supporting a protectionist law. Quoted in William Harbutt Dawson, Protection in Germany: A History of German Fiscal Policy during the Nineteenth Century (London: P. S. King & Son, 1904). 4. Simon Kuznets, Economic Growth and Structure: Selected Essays (London: Heinemann Educational Books, 1965). 5. Lant Pritchett, “Divergence, Big Time,” Journal of Economic Perspectives 11, no. 3, (1997): 3–17; Kenneth Pomeranz, The Great Divergence: China, Europe, and the Making of the Modern World Economy (Princeton, NJ: Princeton University Press, 2000). 6.


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Red Plenty by Francis Spufford

Adam Curtis, affirmative action, anti-communist, Anton Chekhov, asset allocation, Buckminster Fuller, clean water, cognitive dissonance, computer age, double helix, Fellow of the Royal Society, John von Neumann, Kickstarter, Kim Stanley Robinson, Kitchen Debate, linear programming, lost cosmonauts, market clearing, MITM: man-in-the-middle, New Journalism, oil shock, Philip Mirowski, plutocrats, profit motive, RAND corporation, scientific management, Simon Kuznets, the scientific method

For a consideration of the specific window of opportunity that was open to a command economy in the middle of the twentieth century, see Stephen Broadberry and Sayantan Ghosal, ‘Technology, organisation and productivity performance in services: lessons from Britain and the United States since 1870’, Structural Change and Economic Dynamics vol. 16 issue 4 (December 2005), pp. 437–66. 15 Indeed, there was a philosophical issue here: for the planners’ philosophical fidelity to Marx, despite everhing, see Paul Craig Roberts, Alienation and the Soviet Economy (Albuquerque: University of New Mexico Press, 2002). 16 This made it difficult to compare Soviet growth: there is a whole specialised literature, spread over fifty years, on the difficulty of assessing the USSR’s growth rate. For an accessible way in, see Alec Nove, Economic History of the USSR, and Paul R. Gregory and Robert C. Stuart, Russian and Soviet Economic Performance and Structure, 6th edn. (Reading MA: Addison-Wesley, 1998). For Western calculations during the Cold War, see Abram Bergson and Simon Kuznets, eds, Economic Trends in the Soviet Union (Cambridge MA: Harvard University Press, 1963); Janet G. Chapman, Real Wages in Soviet Russia Since 1928, RAND Corporation report R-371-PR (Santa Monica CA, October 1963); Franklyn D. Holzman, ed., Readings on the Soviet Economy (Chicago: Rand-McNally, 1962).

For a consideration of the specific window of opportunity that was open to a command economy in the middle of the twentieth century, see Stephen Broadberry and Sayantan Ghosal, ‘Technology, organisation and productivity performance in services: lessons from Britain and the United States since 1870’, Structural Change and Economic Dynamics vol. 16 issue 4 (December 2005), pp. 437–66. 15 Indeed, there was a philosophical issue here: for the planners’ philosophical fidelity to Marx, despite everything, see Paul Craig Roberts, Alienation and the Soviet Economy (Albuquerque: University of New Mexico Press, 2002). 16 This made it difficult to compare Soviet growth: there is a whole specialised literature, spread over fifty years, on the difficulty of assessing the USSR’s growth rate. For an accessible way in, see Alec Nove, Economic History of the USSR, and Paul R. Gregory and Robert C. Stuart, Russian and Soviet Economic Performance and Structure, 6th edn. (Reading MA: Addison-Wesley, 1998). For Western calculations during the Cold War, see Abram Bergson and Simon Kuznets, eds, Economic Trends in the Soviet Union (Cambridge MA: Harvard University Press, 1963); Janet G. Chapman, Real Wages in Soviet Russia Since 1928, RAND Corporation report R-371-PR (Santa Monica CA, October 1963); Franklyn D. Holzman, ed., Readings on the Soviet Economy (Chicago: Rand-McNally, 1962).

Bauer, Nine Soviet Portraits (Boston: MIT Press, 1965) Anthony Beevor and Luba Vinogradova, eds, A Writer at War: Vasily Grossman with the Red Army 1941–1945 (London: Harvill, 2005) Mark R. Beissinger, Scientific Management, Socialist Discipline and Soviet Power (Cambridge MA: Harvard University Press, 1988) Raissa L. Berg, Acquired Traits: Memoirs of a Geneticist from the Soviet Union, trans. David Lowe (New York: Viking Penguin, 1988) Abram Bergson and Simon Kuznets, eds, Economic Trends in the Soviet Union (Cambridge MA: Harvard University Press, 1963) Abram Bergson, Economics of Soviet Planning (New Haven CT: Yale University Press, 1964) —, Planning and Productivity Under Soviet Socialism (New York: Columbia University Press, 1968) Isaiah Berlin, Russian Thinkers, ed.


pages: 568 words: 174,089

The Power Elite by C. Wright Mills, Alan Wolfe

affirmative action, Albert Einstein, American ideology, anti-communist, Asilomar, collective bargaining, Cornelius Vanderbilt, creative destruction, cuban missile crisis, desegregation, full employment, Ida Tarbell, it's over 9,000, Joseph Schumpeter, long peace, means of production, military-industrial complex, Monroe Doctrine, one-China policy, plutocrats, pneumatic tube, profit motive, Ralph Waldo Emerson, Ronald Reagan, Simon Kuznets, The Theory of the Leisure Class by Thorstein Veblen, Thorstein Veblen, Vilfredo Pareto

From what we know—and we know only a small part—of the legal and the illegal ways of the heavily taxed, we seriously wonder if the drop from 19.1 to 7.4 per cent is as much an illustration of how well the corporate rich have learned to keep information about their income from the government than of an ‘income revolution.’ No one, however, will ever really know. For the kind of official investigation required is not politically feasible. See Simon Kuznets, ‘Shares of Upper Income Groups in Income and Savings,’ National Bureau of Economic Research, Inc., Occasional Paper No. 35, pp. 67 and 59; and Simon Kuznets, assisted by Elizabeth Jenks, Shares of Upper Income Groups in Income and Savings (New York: National Bureau of Economic Research, Inc., 1953). For one debate over the methods employed by Kuznets by means of a different interpretation of tax data, see J.

If one were to include these in the 1949 returns to make them comparable with the 513 in 1929, there would be 145 million-dollar incomes in 1949. On the proportion of families with incomes of less than $2,000 in 1939, see The New York Times,’ (5 March 1952) presentation of Bureau of Census data. 9. ‘Preliminary Findings of the 1955 Survey of Consumer Finances,’ Federal Reserve Bulletin, March 1955, page 3 of reprint. 10. Simon Kuznets, an expert with tax-derived data, finds that the share in total income after taxes of the richest 1 per cent (which goes down to families earning a mere $15,000) of the population has decreased from 19.1 per cent in 1928 to 7.4 per cent in 1945; but he carefully adds: ‘It must be evident from our presentation that we encountered considerable difficulty in contructing estimates with a high degree of reliability and in unearthing data for checking the several hypotheses.’


pages: 614 words: 174,226

The Economists' Hour: How the False Prophets of Free Markets Fractured Our Society by Binyamin Appelbaum

90 percent rule, airline deregulation, Alan Greenspan, Alvin Roth, Andrei Shleifer, anti-communist, battle of ideas, Benoit Mandelbrot, Big bang: deregulation of the City of London, Bretton Woods, British Empire, business cycle, capital controls, Carmen Reinhart, Cass Sunstein, Celtic Tiger, central bank independence, clean water, collective bargaining, Corn Laws, correlation does not imply causation, Credit Default Swap, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, desegregation, Diane Coyle, Donald Trump, Dr. Strangelove, ending welfare as we know it, financial deregulation, financial engineering, financial innovation, fixed income, flag carrier, floating exchange rates, full employment, George Akerlof, George Gilder, Gini coefficient, greed is good, Greenspan put, Growth in a Time of Debt, Ida Tarbell, income inequality, income per capita, index fund, inflation targeting, invisible hand, Isaac Newton, It's morning again in America, Jean Tirole, John Markoff, Kenneth Arrow, Kenneth Rogoff, land reform, Les Trente Glorieuses, long and variable lags, Long Term Capital Management, low cost airline, low interest rates, manufacturing employment, means of production, Menlo Park, minimum wage unemployment, Mohammed Bouazizi, money market fund, Mont Pelerin Society, Network effects, new economy, Nixon triggered the end of the Bretton Woods system, oil shock, Paul Samuelson, Philip Mirowski, Phillips curve, plutocrats, precautionary principle, price stability, profit motive, public intellectual, Ralph Nader, RAND corporation, rent control, rent-seeking, Richard Thaler, road to serfdom, Robert Bork, Robert Gordon, Robert Solow, Ronald Coase, Ronald Reagan, Sam Peltzman, Savings and loan crisis, Silicon Valley, Simon Kuznets, starchitect, Steve Bannon, Steve Jobs, supply-chain management, The Chicago School, The Great Moderation, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, transaction costs, trickle-down economics, ultimatum game, Unsafe at Any Speed, urban renewal, War on Poverty, Washington Consensus, We are all Keynesians now

The government slowly expanded its role in the economy, creating a national currency and then a central bank; establishing federal regulators, first for the railroads and then for a growing range of other industries; and legislating limits on monopolies. But the government remained a small and peripheral actor. As the country sank into the Great Depression, Congress still lacked basic information about the economy. In 1932, it commissioned an estimate of the decline in economic activity; the economist Simon Kuznets reported back in January 1934 that national income had fallen by half between 1929 and 1932. The data was two years old; it still seemed precious. The government printed forty-five hundred copies of the report, and quickly sold them all.25 From the first half of the twentieth century emerged a political consensus that governments should play a much larger role in managing the economy during the second half of the twentieth century.

Both taxing and spending were modest by the standards of developed nations. Instead, by creating a society of smallholders, and then investing in education, Taiwan provided a large share of its population with both the financial and intellectual capital that made it possible to build prosperous lives. The economist Simon Kuznets famously argued that economic growth caused inequality to rise and then fall. In Taiwan, it fell and then stayed down.113 Many economists remained convinced Taiwan was not a model for other countries. They shared the judgment offered by Larry Summers in the early 1990s, during his time as the World Bank’s chief economist: “For most developing countries, relying on imperfect markets rather than imperfect governments has a greater chance for promoting growth.”114 Friedman was not alone in insisting that Taiwan and South Korea would have grown even faster with less management.115 This judgment, however, is not shared by the Taiwanese government, which continues to manage development.

The most thorough and persuasive account of Friedman’s intellectual development is an unpublished 2018 manuscript by Edward Nelson, a Federal Reserve economist, “Milton Friedman and Economic Debate in the United States, 1932–1972,” 2018, books A and B; available at https://sites.google.com/site/edwardnelsonresearch/. 21. Friedman’s doctorate was from Columbia, not Chicago. He spent his second year of graduate studies at Columbia on a fellowship, and returned there to complete the work. His adviser was Simon Kuznets, who won a Nobel Prize for his pioneering role in the development of statistical methods for measuring national economic activity. A version of the thesis was published as Income from Independent Professional Practice (New York: National Bureau of Economic Research, 1945). Friedman’s views of the medical profession remained unchanged.


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A Pelican Introduction Economics: A User's Guide by Ha-Joon Chang

"there is no alternative" (TINA), Affordable Care Act / Obamacare, Alan Greenspan, Albert Einstein, antiwork, AOL-Time Warner, Asian financial crisis, asset-backed security, bank run, banking crisis, banks create money, Bear Stearns, Berlin Wall, bilateral investment treaty, borderless world, Bretton Woods, British Empire, call centre, capital controls, central bank independence, Charles Babbage, collateralized debt obligation, colonial rule, Corn Laws, corporate governance, corporate raider, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deindustrialization, discovery of the americas, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, Fall of the Berlin Wall, falling living standards, financial deregulation, financial engineering, financial innovation, flying shuttle, Ford Model T, Francis Fukuyama: the end of history, Frederick Winslow Taylor, full employment, George Akerlof, Gini coefficient, Glass-Steagall Act, global value chain, Goldman Sachs: Vampire Squid, Gordon Gekko, Great Leap Forward, greed is good, Gunnar Myrdal, Haber-Bosch Process, happiness index / gross national happiness, high net worth, income inequality, income per capita, information asymmetry, intangible asset, interchangeable parts, interest rate swap, inventory management, invisible hand, Isaac Newton, James Watt: steam engine, Johann Wolfgang von Goethe, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, knowledge economy, laissez-faire capitalism, land bank, land reform, liberation theology, manufacturing employment, Mark Zuckerberg, market clearing, market fundamentalism, Martin Wolf, means of production, Mexican peso crisis / tequila crisis, Neal Stephenson, Nelson Mandela, Northern Rock, obamacare, offshore financial centre, oil shock, open borders, Pareto efficiency, Paul Samuelson, post-industrial society, precariat, principal–agent problem, profit maximization, profit motive, proprietary trading, purchasing power parity, quantitative easing, road to serfdom, Robert Shiller, Ronald Coase, Ronald Reagan, savings glut, scientific management, Scramble for Africa, search costs, shareholder value, Silicon Valley, Simon Kuznets, sovereign wealth fund, spinning jenny, structural adjustment programs, The Great Moderation, The Market for Lemons, The Spirit Level, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade liberalization, transaction costs, transfer pricing, trickle-down economics, Vilfredo Pareto, Washington Consensus, working-age population, World Values Survey

.* The school emphasized the importance of understanding the history of how the material production system has changed, both influencing and influenced by law and other social institutions.12 The Developmentalist tradition in the modern world: Development Economics The Developmentalist tradition was advanced in its modern form in the 1950s and the 1960s by economists such as, in alphabetical order, Albert Hirschman (1915–2012), Simon Kuznets (1901–85), Arthur Lewis (1915–91) and Gunnar Myrdal (1899–87) – this time, under the rubric of Development Economics. Writing mostly about the countries on the periphery of capitalism in Asia, Africa and Latin America, they and their followers not only refined the earlier Developmentalist theories but also added quite a lot of new theoretical innovations.

The most reasonable conclusion to draw from the review of various theories and empirical evidence is that neither too little nor too much inequality is good. If it is excessively high or excessively low, inequality may hamper economic growth and create social problems (of different kinds). The Kuznets hypothesis: inequality over time Simon Kuznets, the Russian-born American economist, who won one of the first Nobel Prizes in Economics (in 1971 – the first one was in 1969), proposed a famous theory about inequality over time. The so-called Kuznets hypothesis is that, as a country develops economically, inequality first increases and then decreases.


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Men Without Work by Nicholas Eberstadt

business cycle, Carmen Reinhart, centre right, deindustrialization, financial innovation, full employment, illegal immigration, jobless men, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Rogoff, labor-force participation, low skilled workers, mass immigration, moral hazard, post-work, Ronald Reagan, secular stagnation, Simon Kuznets, The Rise and Fall of American Growth, War on Poverty, women in the workforce, working-age population

6.We cannot readily calculate the corresponding proportion in 1948 because the Census Bureau online historical data series for annual CPS-based estimates of age-and sex-specific enrollments only extend back to 1961. See “School Enrollment Reports and Tables from Previous Years,” U.S. Census Bureau, http://www.census.gov/hhes/school/data/cps/previous/index.html. CHAPTER 4 1.Robert William Fogel et al., Political Arithmetic: Simon Kuznets and the Empirical Tradition in Economics (Chicago: University of Chicago Press, 2013), introduction, http://www.nber.org/chapters/c12912.pdf. 2.Dora L. Costa, “The Wage and the Length of the Work Day: From the 1890s to 1991” (working paper, National Bureau of Economic Research, Cambridge, MA, April 1998), http://www.nber.org/papers/w6504. 3.Dora L.


pages: 409 words: 118,448

An Extraordinary Time: The End of the Postwar Boom and the Return of the Ordinary Economy by Marc Levinson

affirmative action, airline deregulation, Alan Greenspan, banking crisis, Big bang: deregulation of the City of London, Boycotts of Israel, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, car-free, Carmen Reinhart, central bank independence, centre right, clean water, deindustrialization, endogenous growth, falling living standards, financial deregulation, flag carrier, floating exchange rates, full employment, George Gilder, Gini coefficient, global supply chain, Great Leap Forward, guns versus butter model, high-speed rail, income inequality, income per capita, indoor plumbing, informal economy, intermodal, inverted yield curve, invisible hand, It's morning again in America, Kenneth Rogoff, knowledge economy, late capitalism, Les Trente Glorieuses, linear programming, low interest rates, manufacturing employment, Multi Fibre Arrangement, new economy, Nixon shock, Nixon triggered the end of the Bretton Woods system, North Sea oil, oil shock, Paul Samuelson, pension reform, Phillips curve, price stability, purchasing power parity, refrigerator car, Right to Buy, rising living standards, Robert Gordon, rolodex, Ronald Coase, Ronald Reagan, Simon Kuznets, statistical model, strikebreaker, structural adjustment programs, The Rise and Fall of American Growth, Thomas Malthus, total factor productivity, unorthodox policies, upwardly mobile, War on Poverty, Washington Consensus, Winter of Discontent, Wolfgang Streeck, women in the workforce, working-age population, yield curve, Yom Kippur War, zero-sum game

The state’s inability to deliver the ever-rising living standards it had promised would lead to a palpable social anger, with substantial political consequences. Why, in the postwar years, had life gotten so much better for almost everyone? The best-known answer, the one that most influenced elite opinion, was advanced by the renowned American economist Simon Kuznets. His explanation, which linked the development of an advanced industrial society to a more equitable distribution of income, became known as the Kuznets curve. Kuznets, trained as a statistician in Bolshevik Russia, fled to the United States in 1922. He studied economics at Columbia University, earning his master’s degree one year ahead of Arthur Burns, and then became a protégé of business cycle theorist Wesley Mitchell, who would also guide Burns’s career.

National Income 1929–32: Letter from the Acting Secretary of Commerce Transmitting in Response to Senate Resolution No. 220 (72nd Congress) a Report on National Income, 1929–32 (Washington, DC, 1934), 7. Gross national product was for many years the most widely followed measure of economies’ size. It has largely been supplanted by gross domestic product, a measure that excludes net income from foreign sources. 2. Simon Kuznets, “Economic Growth and Income Inequality,” American Economic Review 45 (1955): 1–28. Kuznets acknowledged that his findings pertained to the economies of Europe, North America, and Japan, and that the distribution of income in “underdeveloped” countries might not even out in the same way. 3. The data on income distribution in this paragraph are taken from Anthony B.


pages: 457 words: 125,329

Value of Everything: An Antidote to Chaos The by Mariana Mazzucato

"Friedman doctrine" OR "shareholder theory", activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, Airbnb, Alan Greenspan, bank run, banks create money, Basel III, behavioural economics, Berlin Wall, Big bang: deregulation of the City of London, bonus culture, Bretton Woods, business cycle, butterfly effect, buy and hold, Buy land – they’re not making it any more, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Carmen Reinhart, carried interest, clean tech, Corn Laws, corporate governance, corporate social responsibility, creative destruction, Credit Default Swap, David Ricardo: comparative advantage, debt deflation, European colonialism, Evgeny Morozov, fear of failure, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, financial intermediation, financial repression, full employment, G4S, George Akerlof, Glass-Steagall Act, Google Hangouts, Growth in a Time of Debt, high net worth, Hyman Minsky, income inequality, independent contractor, index fund, informal economy, interest rate derivative, Internet of things, invisible hand, John Bogle, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, knowledge economy, labour market flexibility, laissez-faire capitalism, light touch regulation, liquidity trap, London Interbank Offered Rate, low interest rates, margin call, Mark Zuckerberg, market bubble, means of production, military-industrial complex, Minsky moment, Money creation, money market fund, negative equity, Network effects, new economy, Northern Rock, obamacare, offshore financial centre, Pareto efficiency, patent troll, Paul Samuelson, peer-to-peer lending, Peter Thiel, Post-Keynesian economics, profit maximization, proprietary trading, quantitative easing, quantitative trading / quantitative finance, QWERTY keyboard, rent control, rent-seeking, Robert Solow, Sand Hill Road, shareholder value, sharing economy, short selling, Silicon Valley, Simon Kuznets, smart meter, Social Responsibility of Business Is to Increase Its Profits, software patent, Solyndra, stem cell, Steve Jobs, The Great Moderation, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Tobin tax, too big to fail, trade route, transaction costs, two and twenty, two-sided market, very high income, Vilfredo Pareto, wealth creators, Works Progress Administration, you are the product, zero-sum game

On the other hand, he stressed, activities which do generate welfare should be included - even if they are not paid for. In these, he included free or subsidized government services. One of Pigou's most prominent disciples was the first person to provide an estimate of the fall in national income of the United States during the Great Depression. The Belarusian-born Simon Kuznets (1901-85), a Professor of Economics at Harvard, won the Nobel Prize in Economics in 1971 for his work on national accounts. Believing that they incurred costs without adding to final economic output, Kuznets, unlike Pigou, excluded from the production boundary all government activities that did not immediately result in a flow of goods or services to households - public administration, defence, justice, international relations, provision of infrastructure and so on.9 Kuznets also believed that some household expenditure did not increase the material standard of living, but simply paid for the cost of modern life - in particular the ‘inflated costs of urban civilization', such as having to maintain a bank account, pay trade union dues or the social obligation to be a member of a club.

Businesses would buy at least some of those goods (e.g. some public services cost money) with a fee; but because they were spending more on them (than if government was not producing anything, and therefore not buying supplies from businesses), their operating surplus and value added would inevitably fall. Government's share of GDP would rise, but the absolute size of GDP would stay the same. This does, of course, run counter to Keynesian attempts to show how increases in government demand could lift GDP. Many economists made exactly this argument in the 1930s and 1940s -in particular Simon Kuznets, who suggested that only government nonmarket and free goods provided to households should be allowed to increase GDP. Nevertheless, the convention that all government spending counts as final consumption arose during the Great Depression and the Second World War, when the US needed to justify its enormous government spending (the spike in the light-grey line in Figure 8 in the early 1940s).


pages: 374 words: 114,660

The Great Escape: Health, Wealth, and the Origins of Inequality by Angus Deaton

Admiral Zheng, agricultural Revolution, Branko Milanovic, BRICs, British Empire, call centre, carbon tax, clean water, colonial exploitation, Columbian Exchange, compensation consultant, creative destruction, declining real wages, Downton Abbey, Easter island, Edward Jenner, end world poverty, financial engineering, financial innovation, Ford Model T, germ theory of disease, Gini coefficient, Glass-Steagall Act, Great Leap Forward, illegal immigration, income inequality, invention of agriculture, invisible hand, John Snow's cholera map, knowledge economy, Louis Pasteur, low skilled workers, new economy, off-the-grid, Paul Volcker talking about ATMs, purchasing power parity, randomized controlled trial, rent-seeking, rising living standards, Robert Solow, Ronald Reagan, Simon Kuznets, Steve Jobs, Steven Pinker, structural adjustment programs, The Spirit Level, too big to fail, trade route, Tragedy of the Commons, very high income, War on Poverty, zoonotic diseases

Top Incomes in the United States The study of income inequality was transformed by a 2003 study by two economists, Thomas Piketty, now of the Paris School of Economics, and Emmanuel Saez of the University of California at Berkeley.24 It had long been known that the data on incomes from household surveys were not very useful for looking at very high incomes; there are too few such people to show up regularly in nationally representative surveys. (Even if approached at random, they might also be less likely to answer.) Piketty and Saez greatly extended a method that had been originally used in 1953 by Nobel laureate economist Simon Kuznets, who worked with data from income-tax records.25 The rich, like everyone else, have no choice but to file tax returns, and so they are fully represented in the income-tax data. Piketty and Saez’s results have changed the way that people think about income inequality, particularly at the top of the distribution.

Lee, 1999, “Wage inequality in the United States during the 1980s: Rising dispersion or falling minimum wage,” Quarterly Journal of Economics 114(3): 977–1023. 23. Congressional Budget Office, 2011, Trends in the distribution of household income between 1979 and 2007, Washington, DC. 24. Thomas Piketty and Emmanuel Saez, 2003, “Income inequality in the United States 1913–1998,” Quarterly Journal of Economics 118(1): 1–41. 25. Simon Kuznets, 1953, Shares of upper income groups in income and saving, National Bureau of Economic Research. 26. Incomes in the Piketty-Saez analysis are taxable incomes and are incomes of tax units, not of families or of households, which would include unrelated individuals. The Congressional Budget Office income numbers quoted earlier include some of the items included in the national accounts, but not in the surveys.


pages: 288 words: 16,556

Finance and the Good Society by Robert J. Shiller

Alan Greenspan, Alvin Roth, bank run, banking crisis, barriers to entry, Bear Stearns, behavioural economics, benefit corporation, Bernie Madoff, buy and hold, capital asset pricing model, capital controls, Carmen Reinhart, Cass Sunstein, cognitive dissonance, collateralized debt obligation, collective bargaining, computer age, corporate governance, Daniel Kahneman / Amos Tversky, democratizing finance, Deng Xiaoping, diversification, diversified portfolio, Donald Trump, Edward Glaeser, eurozone crisis, experimental economics, financial engineering, financial innovation, financial thriller, fixed income, full employment, fundamental attribution error, George Akerlof, Great Leap Forward, Ida Tarbell, income inequality, information asymmetry, invisible hand, John Bogle, joint-stock company, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, land reform, loss aversion, Louis Bachelier, Mahatma Gandhi, Mark Zuckerberg, market bubble, market design, means of production, microcredit, moral hazard, mortgage debt, Myron Scholes, Nelson Mandela, Occupy movement, passive investing, Ponzi scheme, prediction markets, profit maximization, quantitative easing, random walk, regulatory arbitrage, Richard Thaler, Right to Buy, road to serfdom, Robert Shiller, Ronald Reagan, selection bias, self-driving car, shareholder value, Sharpe ratio, short selling, Simon Kuznets, Skype, social contagion, Steven Pinker, tail risk, telemarketer, Thales and the olive presses, Thales of Miletus, The Market for Lemons, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, Vanguard fund, young professional, zero-sum game, Zipcar

Without e ective rules one is forced to do things that one nds personally questionable to stay in business. That is why businesses set up their own self-regulatory organizations, which impose rules that are usually (though, to be sure, not always) in the public interest. But there are some who think that regulators are not doing anything of the sort. Milton Friedman, following his 1954 study with Simon Kuznets of occupational incomes and regulation, made a strongly worded argument against regulation, particularly occupational licensing, in his 1962 book Capitalism and Freedom.1 He thought regulation was little more than a cynical ploy to limit the supply of services so as to keep their prices high. Friedman’s book turned out to be very in uential, creating a measure of public distaste for regulation.

Freud, Sigmund. 1952 [1930]. Civilization and Its Discontents, trans. Joan Reviere. The Major Works of Sigmund Freud. Chicago: William Benton / Encyclopaedia Britannica. Friedman, Milton (with Rose D. Friedman). 1962. Capitalism and Freedom. Chicago: University of Chicago Press. Friedman, Milton, and Simon Kuznets. 1945. Income from Independent Professional Practice. New York: National Bureau of Economic Research. Gale, David., and Lloyd S. Shapley. 1962. “College Admissions and the Stability of Marriage.” American Mathematical Society Monthly 69(1):9–15. Gartner, John D. 2005. The Hypomanic Edge: The Link between (a Little) Craziness and (a Lot of) Success in America.


pages: 453 words: 122,586

Samuelson Friedman: The Battle Over the Free Market by Nicholas Wapshott

2021 United States Capitol attack, Alan Greenspan, bank run, basic income, battle of ideas, Bear Stearns, Berlin Wall, Bretton Woods, business cycle, California gold rush, collective bargaining, coronavirus, corporate governance, COVID-19, creative destruction, David Ricardo: comparative advantage, Donald Trump, double helix, en.wikipedia.org, fiat currency, financial engineering, fixed income, floating exchange rates, full employment, God and Mammon, greed is good, Gunnar Myrdal, income inequality, indoor plumbing, invisible hand, John von Neumann, Joseph Schumpeter, Kenneth Arrow, laissez-faire capitalism, light touch regulation, liquidity trap, lockdown, low interest rates, Machinery of Freedom by David Friedman, market bubble, market clearing, mass immigration, military-industrial complex, Money creation, money market fund, Mont Pelerin Society, moral hazard, new economy, Nixon shock, Nixon triggered the end of the Bretton Woods system, paradox of thrift, Paul Samuelson, Philip Mirowski, Phillips curve, price mechanism, price stability, public intellectual, pushing on a string, quantitative easing, rent control, road to serfdom, Robert Bork, Robert Solow, Ronald Coase, Ronald Reagan, school vouchers, seminal paper, Simon Kuznets, social distancing, Tax Reform Act of 1986, The Chicago School, The Great Moderation, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Thorstein Veblen, too big to fail, trickle-down economics, universal basic income, upwardly mobile, urban renewal, War on Poverty, We are all Keynesians now, Works Progress Administration, zero-sum game

Friedman was taken on by the National Resources Committee in Washington, D.C., to research how Americans spent their incomes, work that would eventually find its way into Friedman’s 1957 book, A Theory of the Consumption Function. In the fall of 1937, Friedman switched to the National Bureau of Economic Research (NBER) in New York, where he was made assistant to Simon Kuznets,17 who was researching the incomes of professional Americans to provide the federal government with the first accurate assessment of total national income.18 Part of Friedman’s workload was to complete a study Kuznets was undertaking into professional qualifications, in particular the difference in salaries between doctors and dentists.

As Friedman’s campaigning gathered pace, Samuelson could hardly ignore his rival’s many achievements. At first, as was the Keynesian way with dissenters, Samuelson ignored Friedman, or ridiculed his insurgent status. In the first edition of his Economics textbook, Friedman’s name appears just once, and even then only in a footnote citing a paper he had written with Simon Kuznets. But as Friedman’s long march gathered pace, Samuelson was obliged to credit him with a succession of triumphs. Friedman, meanwhile, insisted that he had not deliberately conspired to undermine the existing order. “People have a tendency to attribute to me a long-term plan,” he wrote. “I did no planning whatsoever.


pages: 445 words: 122,877

Career and Family: Women’s Century-Long Journey Toward Equity by Claudia Goldin

coronavirus, correlation coefficient, COVID-19, en.wikipedia.org, equal pay for equal work, estate planning, financial independence, gender pay gap, glass ceiling, global pandemic, Grace Hopper, hiring and firing, income inequality, Internet Archive, job automation, labor-force participation, longitudinal study, occupational segregation, old-boy network, principal–agent problem, profit maximization, remote working, Silicon Valley, Simon Kuznets, social distancing, women in the workforce, Works Progress Administration, young professional

She demonstrated the economic importance of women’s labor in the language of national income accounting, just as that arcane field was taking form. We’ve grown so accustomed to front-page stories that use economists’ lingo—GNP, GDP, national income, unemployment rate—that we don’t realize just how recently these notions were crafted. The person who played an outsized role in their creation was an immigrant named Simon Kuznets. Simon Kuznets emigrated from Russia in 1922 and received a PhD from Columbia University in 1926. A year later, he became a staff researcher at the National Bureau of Economic Research (NBER), an institution founded in New York City in 1920 to provide the US with its statistical foundations, something the government began to undertake in the 1930s.


pages: 165 words: 45,129

The Economics of Inequality by Thomas Piketty, Arthur Goldhammer

affirmative action, basic income, Capital in the Twenty-First Century by Thomas Piketty, collective bargaining, conceptual framework, deindustrialization, endogenous growth, Gini coefficient, income inequality, low skilled workers, means of production, middle-income trap, moral hazard, Pareto efficiency, purchasing power parity, Robert Solow, Simon Kuznets, Tax Reform Act of 1986, The Bell Curve by Richard Herrnstein and Charles Murray, very high income, working-age population

In the 1890s Eduard Bernstein insisted that Marx’s proletarianization thesis did not hold because the social structure was clearly becoming more diverse and wealth was spreading to ever broader segments of society. It was not until after World War II, however, that it became possible to measure the decrease in wage and income inequality in the Western countries. New predictions were soon forthcoming. The most celebrated was that of Simon Kuznets (1955): according to Kuznets, inequality would everywhere be described by an inverted U curve. In the first phase of development, inequality would increase as traditional agricultural societies industrialized and urbanized. This would be followed by a second phase of stabilization, and then a third phase in which inequality would substantially decrease.


The Limits of the Market: The Pendulum Between Government and Market by Paul de Grauwe, Anna Asbury

Alan Greenspan, banking crisis, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, conceptual framework, crony capitalism, Easter island, Erik Brynjolfsson, eurozone crisis, Honoré de Balzac, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, Kitchen Debate, means of production, Money creation, moral hazard, Paul Samuelson, price discrimination, price mechanism, profit motive, Robert Gordon, Robert Solow, Ronald Coase, Simon Kuznets, The Nature of the Firm, The Rise and Fall of American Growth, too big to fail, transaction costs, trickle-down economics, ultimatum game, very high income

It will therefore be a very long time before the internal regulator will guide the system from the satisfaction of material requirements towards non-material needs. Meanwhile the market system sails inevitably towards its limits. Kuznets’s Dream Based on a statistical analysis of US tax data between  and , the American economist Simon Kuznets came to the remarkable conclusion in  that income inequality in the US had dropped substantially. Based on this fact, Kuznets decided that capitalism contains a law which ensures that as a country becomes richer, income inequality drops. He expressed this in what would later be called the Kuznets curve, as shown in Figure ..


pages: 191 words: 51,242

Unsustainable Inequalities: Social Justice and the Environment by Lucas Chancel

"World Economic Forum" Davos, Anthropocene, behavioural economics, biodiversity loss, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, carbon tax, centre right, clean water, COVID-19, disinformation, Donald Trump, energy security, energy transition, financial deregulation, Francis Fukuyama: the end of history, Gini coefficient, green new deal, income inequality, Indoor air pollution, job satisfaction, low skilled workers, offshore financial centre, oil shock, price stability, purchasing power parity, Ronald Reagan, Simon Kuznets, The Spirit Level, The Theory of the Leisure Class by Thorstein Veblen, Thorstein Veblen, trade liberalization, Tragedy of the Commons, transaction costs, urban planning, very high income, Washington Consensus

Let us now turn to the relationship between inequality and economic growth, or, more broadly, between inequality and a healthy economy. Let us begin by recalling a theory I mentioned earlier, which for several decades strongly influenced thinking about this relationship. It was illustrated by the famous Kuznets curve, plotted in 1955 by the Belarusian American economist Simon Kuznets, a future Nobel laureate, who argued that income inequality rises during the initial stages of a country’s development and then flattens out before finally falling, at least in the case of the United States, the United Kingdom, and Germany between the end of the nineteenth century and the middle of the twentieth.26 The explanation Kuznets gave for this pattern is that when a society industrializes, some will benefit from the strong growth of the industrial sector and others will not—hence the rise in inequality in the initial phases of a country’s development.


Crisis and Leviathan: Critical Episodes in the Growth of American Government by Robert Higgs, Arthur A. Ekirch, Jr.

Alistair Cooke, American ideology, business cycle, clean water, collective bargaining, creative destruction, credit crunch, declining real wages, endowment effect, fiat currency, fixed income, foreign exchange controls, full employment, Glass-Steagall Act, guns versus butter model, hiring and firing, Ida Tarbell, income per capita, Jones Act, Joseph Schumpeter, laissez-faire capitalism, land bank, manufacturing employment, means of production, military-industrial complex, minimum wage unemployment, plutocrats, post-industrial society, power law, price discrimination, profit motive, rent control, rent-seeking, Richard Thaler, road to serfdom, Ronald Reagan, Sam Peltzman, Savings and loan crisis, Simon Kuznets, strikebreaker, The Wealth of Nations by Adam Smith, total factor productivity, transaction costs, transcontinental railway, union organizing, Upton Sinclair, War on Poverty, Works Progress Administration

See "A Theory of Competition among Pressure Groups for Political Influence," Quarterly Journal of Economics 98 (Aug. 1983): 383. 7. Edward S. Herman, Corporate Control, Corporate Power (New York: Cambridge University Press, 1981), pp. 299-300. For comparative international data on the growth of government, see Simon Kuznets, Modern Economic Growth: Rate, Structure, and Spread (New Haven, Conn.: Yale University Press, 1966), pp. 236-239; Leila Pathirane and Derek W. Blades, "Defining and Measuring the Public Sector: Some International Comparisons," Review of Income and Wealth 28 (Sept. 1982): 261-289; Alt and Chrystal, Political Economics, pp. 199-219. 8.

Henry Steele Commager (New York: Appleton-CenturyCrofts, 1948), II, pp. 143-146, 174-180. 3. Andrew Carnegie, Triumphant Democracy: Sixty Years'March of the Republic, rev. ed. (New York: Charles Scribner's Sons, 1893), p. 494; Henry George, Progress and Poverty (New York: Modern Library, n.d.), p. 7. 4. Simon Kuznets, Capital in the American Economy, Its Formation and Financing (Princeton, N.J.: Princeton University Press, 1961), p. 64; Stanley Lebergott, "Labor Force and Employment, 1800-1960," in National Bureau of Economic Research, Conference on Research in Income and Wealth, Output, Employment, and Productivity in the United States after 1800 (New York: Columbia University Press, 1966), p. 118. 5.


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Wealth and Poverty: A New Edition for the Twenty-First Century by George Gilder

accelerated depreciation, affirmative action, Albert Einstein, Bear Stearns, Bernie Madoff, book value, British Empire, business cycle, capital controls, clean tech, cloud computing, collateralized debt obligation, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, deindustrialization, diversified portfolio, Donald Trump, equal pay for equal work, floating exchange rates, full employment, gentrification, George Gilder, Gunnar Myrdal, Home mortgage interest deduction, Howard Zinn, income inequality, independent contractor, inverted yield curve, invisible hand, Jane Jacobs, Jeff Bezos, job automation, job-hopping, Joseph Schumpeter, junk bonds, knowledge economy, labor-force participation, longitudinal study, low interest rates, margin call, Mark Zuckerberg, means of production, medical malpractice, Michael Milken, minimum wage unemployment, Money creation, money market fund, money: store of value / unit of account / medium of exchange, Mont Pelerin Society, moral hazard, mortgage debt, non-fiction novel, North Sea oil, paradox of thrift, Paul Samuelson, plutocrats, Ponzi scheme, post-industrial society, power law, price stability, Ralph Nader, rent control, Robert Gordon, Robert Solow, Ronald Reagan, San Francisco homelessness, scientific management, Silicon Valley, Simon Kuznets, Skinner box, skunkworks, Solyndra, Steve Jobs, The Wealth of Nations by Adam Smith, Thomas L Friedman, upwardly mobile, urban renewal, volatility arbitrage, War on Poverty, women in the workforce, working poor, working-age population, yield curve, zero-sum game

Yet this expected inflation would radically erode the capital prospects of American business unless taxes on wealth were drastically reduced. In this predicament the liberal economists found it possible to sing all their same old songs. They cited Denison’s Law to show that savings rates over the centuries had maintained an even level, regardless of interest rates, although Nobel winner Simon Kuznets had widely different estimates; and the idea that interest rates do not affect savings is self-evidently false. As economists have done for centuries, the liberals speculated that the vital energy and innovative genius of capitalism were near exhaustion and that government would now have to take the lead.

Kenniston, Kenneth Keynes, John Maynard Keynesian school Khrushchev, Nikita Klein, Burton knowledge technocracy Kodak. See Eastman Kodak Company Ko Kolakowski, Leszek Korea Korean War Krehm, William Kristol, Irving Kroc, Ray Krugman, Paul Kudlow, Larry Kuznets, Simon Kuznets curve Kwakiutl L labor, capitalization of elasticity of Labor Department labor market, equal rights agencies and restrictions labor unions Laffer, Arthur Laffer curve and Lafferite economics Laissez-faire land. See real estate land grant agricultural colleges Lasch, Christopher lasers Latin America Latvia Lauder, Estée Law Enforcement Assistance Administration Law of mind Law of Reciprocity Left legalized aliens legislators Lehman Brothers Leibenstein, Harvey leisure Levi-Strauss, Claude Levitt, Theodore Lewis, Michael Lewis the Fourteenth Lewis, W.


pages: 524 words: 155,947

More: The 10,000-Year Rise of the World Economy by Philip Coggan

accounting loophole / creative accounting, Ada Lovelace, agricultural Revolution, Airbnb, airline deregulation, Alan Greenspan, Andrei Shleifer, anti-communist, Apollo 11, assortative mating, autonomous vehicles, bank run, banking crisis, banks create money, basic income, Bear Stearns, Berlin Wall, Black Monday: stock market crash in 1987, Bletchley Park, Bob Noyce, Boeing 747, bond market vigilante , Branko Milanovic, Bretton Woods, Brexit referendum, British Empire, business cycle, call centre, capital controls, carbon footprint, carbon tax, Carl Icahn, Carmen Reinhart, Celtic Tiger, central bank independence, Charles Babbage, Charles Lindbergh, clean water, collective bargaining, Columbian Exchange, Columbine, Corn Laws, cotton gin, credit crunch, Credit Default Swap, crony capitalism, cross-border payments, currency peg, currency risk, debt deflation, DeepMind, Deng Xiaoping, discovery of the americas, Donald Trump, driverless car, Easter island, Erik Brynjolfsson, European colonialism, eurozone crisis, Fairchild Semiconductor, falling living standards, financial engineering, financial innovation, financial intermediation, floating exchange rates, flying shuttle, Ford Model T, Fractional reserve banking, Frederick Winslow Taylor, full employment, general purpose technology, germ theory of disease, German hyperinflation, gig economy, Gini coefficient, Glass-Steagall Act, global supply chain, global value chain, Gordon Gekko, Great Leap Forward, greed is good, Greenspan put, guns versus butter model, Haber-Bosch Process, Hans Rosling, Hernando de Soto, hydraulic fracturing, hydroponic farming, Ignaz Semmelweis: hand washing, income inequality, income per capita, independent contractor, indoor plumbing, industrial robot, inflation targeting, Isaac Newton, James Watt: steam engine, job automation, John Snow's cholera map, joint-stock company, joint-stock limited liability company, Jon Ronson, Kenneth Arrow, Kula ring, labour market flexibility, land reform, land tenure, Lao Tzu, large denomination, Les Trente Glorieuses, liquidity trap, Long Term Capital Management, Louis Blériot, low cost airline, low interest rates, low skilled workers, lump of labour, M-Pesa, Malcom McLean invented shipping containers, manufacturing employment, Marc Andreessen, Mark Zuckerberg, Martin Wolf, McJob, means of production, Mikhail Gorbachev, mittelstand, Modern Monetary Theory, moral hazard, Murano, Venice glass, Myron Scholes, Nelson Mandela, Network effects, Northern Rock, oil shale / tar sands, oil shock, Paul Samuelson, Paul Volcker talking about ATMs, Phillips curve, popular capitalism, popular electronics, price stability, principal–agent problem, profit maximization, purchasing power parity, quantitative easing, railway mania, Ralph Nader, regulatory arbitrage, road to serfdom, Robert Gordon, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, savings glut, scientific management, Scramble for Africa, Second Machine Age, secular stagnation, Silicon Valley, Simon Kuznets, South China Sea, South Sea Bubble, special drawing rights, spice trade, spinning jenny, Steven Pinker, Suez canal 1869, TaskRabbit, techlash, Thales and the olive presses, Thales of Miletus, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Rise and Fall of American Growth, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Malthus, Thorstein Veblen, trade route, Tragedy of the Commons, transaction costs, transatlantic slave trade, transcontinental railway, Triangle Shirtwaist Factory, universal basic income, Unsafe at Any Speed, Upton Sinclair, V2 rocket, Veblen good, War on Poverty, Washington Consensus, Watson beat the top human players on Jeopardy!, women in the workforce, world market for maybe five computers, Yom Kippur War, you are the product, zero-sum game

Capital in this sense means wealth; if the return from owning land, or equipment, or financial assets is greater than the growth of GDP, then the rich (who own most of the capital) will keep getting richer.27 But the trend did seem to change as industrialisation developed. British inequality peaked in around 1867 and US inequality in the early 20th century.28 Simon Kuznets, the economist who devised GDP measures (see Appendix), suggested that inequality would decline as societies became richer. More people would be educated, and would be able to take high-skilled jobs; they would also demand policies that redistributed income in their favour. The very high taxes required to finance the two world wars clearly made a dent in inequality.

(Port of Felixstowe) APPENDIX The numbers game The Great Depression was the biggest event in global economic history. When it struck, knowledge of the economy was very limited. The concept of gross domestic product (GDP) was not defined, let alone measured, until 1934 when it was defined as “national income”. The task of establishing a measure of national income fell to a brilliant economist named Simon Kuznets, after a US Senate committee asked him to do so. With the help of staff from the Commerce Department and the National Bureau of Economic Research, Kuznets managed to set the blueprint for national accounts in 1934 within 12 months of being handed the assignment.1 A fuller report followed in 1937.


pages: 1,324 words: 159,290

Grand Transitions: How the Modern World Was Made by Vaclav Smil

8-hour work day, agricultural Revolution, AltaVista, Anthropocene, Any sufficiently advanced technology is indistinguishable from magic, biodiversity loss, Biosphere 2, Boeing 747, caloric restriction, caloric restriction, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, carbon tax, circular economy, clean water, complexity theory, correlation does not imply causation, COVID-19, decarbonisation, degrowth, deindustrialization, dematerialisation, demographic dividend, demographic transition, Deng Xiaoping, disruptive innovation, energy transition, European colonialism, Extinction Rebellion, Ford Model T, garden city movement, general purpose technology, Gini coefficient, Google Hangouts, Great Leap Forward, Haber-Bosch Process, Hans Rosling, hydraulic fracturing, hydrogen economy, income inequality, income per capita, Indoor air pollution, Intergovernmental Panel on Climate Change (IPCC), invention of movable type, Johann Wolfgang von Goethe, Just-in-time delivery, knowledge economy, Law of Accelerating Returns, manufacturing employment, mass immigration, megacity, meta-analysis, microplastics / micro fibres, ocean acidification, oil shale / tar sands, old age dependency ratio, peak oil, planetary scale, planned obsolescence, power law, precision agriculture, purchasing power parity, RAND corporation, Ray Kurzweil, Republic of Letters, Robert Solow, Silicon Valley, Simon Kuznets, Singularitarianism, Skype, Steven Pinker, Suez canal 1869, the built environment, The Rise and Fall of American Growth, total factor productivity, urban decay, urban planning, urban sprawl, working-age population

In contrast, many late starters have moved from traditional agrarian or pastoral/nomadic societies to resource extractors (Iran or Saudi Arabia) or to providers of manufactured goods, often with concentration on particular sectors: post-1950 Taiwan and post-1970 South Korea are perhaps the most successful examples of this rapid shift. Studies of structural shifts began during the 1930s (Fisher 1939; Clark 1940) and attracted greater attention after World War II with major (and now considered classic) contributions by Jean Fourastié (1949), Theodore Schultz (1953), Walter Rostow (1960), and Simon Kuznets (1966). Following the structural transition from traditional economies to modern societies is often problematic because reliable data on employment and origins of GDP may be only of recent origin and because many totals are insufficiently subdivided. Most commonly, labor data are available only for broad categories of primary, secondary, and tertiary production.

Neither of these indices deals with environmental degradation that obviously detracts from quality-of-life gains, but a proposal by Daly and Cobb (1989) to include it in the per capita Index of Sustainable Welfare (ISEW) was never developed into an accepted tool. And a truly representative index should also account for dis-services caused by economic growth, perhaps along the lines suggested by Simon Kuznets before WW II (Kuznets 1937). His short (and obviously arguable) list of such dis-services, common in all modern acquisitive societies, included all military expenses, most outlays on advertising, costs of many financial and speculative activities, and, most importantly, those outlays on our urban living (such as extensive transportation or expensive houses) that became necessary in order to cope with the modern world’s difficulties and that amount to costs implicit in our civilization.


pages: 221 words: 55,901

The Globalization of Inequality by François Bourguignon

Berlin Wall, Branko Milanovic, Capital in the Twenty-First Century by Thomas Piketty, collective bargaining, Credit Default Swap, deglobalization, deindustrialization, Doha Development Round, Edward Glaeser, European colonialism, Fall of the Berlin Wall, financial deregulation, financial intermediation, gender pay gap, Gini coefficient, Glass-Steagall Act, income inequality, income per capita, labor-force participation, liberal capitalism, low interest rates, minimum wage unemployment, offshore financial centre, open economy, Pareto efficiency, purchasing power parity, race to the bottom, Robert Gordon, Simon Kuznets, structural adjustment programs, The Spirit Level, too big to fail, very high income, Washington Consensus

Inequality fell once the economy had fully settled into the new regime and the mechanisms for redistributing income had been reconfigured. We don’t observe such a turnaround among the Asian giants. The Forces behind R ising Inequality 113 Globalization, Deregulation, Inequality Around sixty years ago, the U.S. economist Simon Kuznets, who had studied the evolution of inequality in several developed countries, formulated a hypothesis that would become widely influential. His idea was that in an initial stage, the process of economic development increases inequality by displacing a portion of the population from traditional occupations toward more productive, but also more heterogeneous, jobs, thus creating more inequality.


pages: 254 words: 61,387

This Could Be Our Future: A Manifesto for a More Generous World by Yancey Strickler

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, Abraham Maslow, accelerated depreciation, Adam Curtis, basic income, benefit corporation, Big Tech, big-box store, business logic, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, cognitive dissonance, corporate governance, Daniel Kahneman / Amos Tversky, data science, David Graeber, Donald Trump, Doomsday Clock, Dutch auction, effective altruism, Elon Musk, financial independence, gender pay gap, gentrification, global supply chain, Hacker News, housing crisis, Ignaz Semmelweis: hand washing, invention of the printing press, invisible hand, Jeff Bezos, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Nash: game theory, Joi Ito, Joseph Schumpeter, Kickstarter, Kōnosuke Matsushita, Larry Ellison, Louis Pasteur, Mark Zuckerberg, medical bankruptcy, Mr. Money Mustache, new economy, Oculus Rift, off grid, offshore financial centre, Parker Conrad, Ralph Nader, RAND corporation, Richard Thaler, Ronald Reagan, Rutger Bregman, self-driving car, shareholder value, Silicon Valley, Simon Kuznets, Snapchat, Social Responsibility of Business Is to Increase Its Profits, Solyndra, stem cell, Steve Jobs, stock buybacks, TechCrunch disrupt, TED Talk, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Travis Kalanick, Tyler Cowen, universal basic income, white flight, Zenefits

When GDP goes up, businesses, consumers, and government are spending more money than in the recent past. In economic terms, this is referred to as a growing economy. When GDP goes down, this means less money is being spent. When this happens for at least six months, this is called a recession. The person who introduced GDP to the world was an economist named Simon Kuznets. Kuznets proposed GDP after the Great Depression as a bird’s-eye view of what was happening in the economy. Within a decade it became a global standard. Today virtually all economies on Earth are measured this same way. When Kuznets proposed the metric, he pointed out some of its limitations.


pages: 626 words: 167,836

The Technology Trap: Capital, Labor, and Power in the Age of Automation by Carl Benedikt Frey

3D printing, AlphaGo, Alvin Toffler, autonomous vehicles, basic income, Bernie Sanders, Branko Milanovic, British Empire, business cycle, business process, call centre, Cambridge Analytica, Capital in the Twenty-First Century by Thomas Piketty, Charles Babbage, Clayton Christensen, collective bargaining, computer age, computer vision, Corn Laws, Cornelius Vanderbilt, creative destruction, data science, David Graeber, David Ricardo: comparative advantage, deep learning, DeepMind, deindustrialization, demographic transition, desegregation, deskilling, Donald Trump, driverless car, easy for humans, difficult for computers, Edward Glaeser, Elon Musk, Erik Brynjolfsson, everywhere but in the productivity statistics, factory automation, Fairchild Semiconductor, falling living standards, first square of the chessboard / second half of the chessboard, Ford Model T, Ford paid five dollars a day, Frank Levy and Richard Murnane: The New Division of Labor, full employment, future of work, game design, general purpose technology, Gini coefficient, Great Leap Forward, Hans Moravec, high-speed rail, Hyperloop, income inequality, income per capita, independent contractor, industrial cluster, industrial robot, intangible asset, interchangeable parts, Internet of things, invention of agriculture, invention of movable type, invention of the steam engine, invention of the wheel, Isaac Newton, James Hargreaves, James Watt: steam engine, Jeremy Corbyn, job automation, job satisfaction, job-hopping, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kickstarter, Kiva Systems, knowledge economy, knowledge worker, labor-force participation, labour mobility, Lewis Mumford, Loebner Prize, low skilled workers, machine translation, Malcom McLean invented shipping containers, manufacturing employment, mass immigration, means of production, Menlo Park, minimum wage unemployment, natural language processing, new economy, New Urbanism, Nick Bostrom, Norbert Wiener, nowcasting, oil shock, On the Economy of Machinery and Manufactures, OpenAI, opioid epidemic / opioid crisis, Pareto efficiency, pattern recognition, pink-collar, Productivity paradox, profit maximization, Renaissance Technologies, rent-seeking, rising living standards, Robert Gordon, Robert Solow, robot derives from the Czech word robota Czech, meaning slave, safety bicycle, Second Machine Age, secular stagnation, self-driving car, seminal paper, Silicon Valley, Simon Kuznets, social intelligence, sparse data, speech recognition, spinning jenny, Stephen Hawking, tacit knowledge, The Future of Employment, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Malthus, total factor productivity, trade route, Triangle Shirtwaist Factory, Turing test, union organizing, universal basic income, warehouse automation, washing machines reduced drudgery, wealth creators, women in the workforce, working poor, zero-sum game

The technological virtuosity of the nineteenth and early twentieth centuries took some time to trickle down to the economics profession. But in the 1950s, Robert Solow, who would go on to win the Nobel Prize in Economics in 1987, found that virtually all economic advance over the twentieth century had been thanks to technology. And others documented that those gains had been widely shared. Simon Kuznets found that America had become more equal and advanced his theory of capitalist development in which inequality automatically decreases along the industrialization path. Nicholas Kaldor observed that labor had consistently reaped about two-thirds of the gains of growth. And Solow developed a theoretical framework in which progress delivered equal benefits for every social group around that time.

In the 1950s, Robert Solow advanced a model of a balanced growth path, in which progress delivered equal benefits for every social group; Kaldor put forward his stylized facts of economic growth, showing that the labor share of income had remained roughly constant, at two-thirds of national income, despite rapid mechanization; and Simon Kuznets advanced his hugely optimistic theory of economic progress in which inequality automatically decreases, regardless of economic policy choices.54 Their optimism surely seemed warranted at the time. Schumpeterian growth did indeed make America both richer and more equal. Like the doomsday economists of the Industrial Revolution, however, twentieth-century economists were unfortunately fond of developing iron laws of economics that could be used to explain the trajectory of capitalist development for every time and place, though it is not hard to understand their appeal.


pages: 877 words: 182,093

Wealth, Poverty and Politics by Thomas Sowell

affirmative action, Alan Greenspan, Albert Einstein, British Empire, Capital in the Twenty-First Century by Thomas Piketty, colonial exploitation, colonial rule, Cornelius Vanderbilt, correlation does not imply causation, cotton gin, Deng Xiaoping, desegregation, European colonialism, full employment, government statistician, Great Leap Forward, Gunnar Myrdal, Herman Kahn, income inequality, income per capita, invention of the sewing machine, invisible hand, low skilled workers, mass immigration, means of production, minimum wage unemployment, New Urbanism, profit motive, rent control, Scramble for Africa, Simon Kuznets, Steve Jobs, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, transatlantic slave trade, transcontinental railway, trickle-down economics, vertical integration, very high income, W. E. B. Du Bois, War on Poverty

William Easterly, The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor (New York: Basic Books, 2013), p. 79. 30. Kay S. Hymowitz, “Brooklyn’s Chinese Pioneers,” City Journal, Spring 2014, pp. 26, 27. 31. Irving Howe, World of Our Fathers, pp. 156–159; Jacob Riis, How the Other Half Lives: Studies Among the Tenements of New York (New York: Charles Scribner’s Sons, 1914), p. 125. 32. Simon Kuznets, “Immigration of Russian Jews to the United States: Background and Structure,” Perspectives in American History, Vol. IX (1975), pp. 115–116. 33. Reports of the Immigration Commission, The Children of Immigrants in Schools (Washington: Government Printing Office, 1911), Vol. I, p. 110. 34. Carl C.

Solomon Grayzel, A History of the Jews: From the Babylonian Exile to the End of World War II (Philadelphia: The Jewish Publication Society of America, 1947), pp. 355–356, 386–394; Jonathan I. Israel, European Jewry in the Age of Mercantilism: 1550–1750 (Oxford: Clarendon Press, 1985), pp. 5, 6. 45. W. Cunningham, Alien Immigrants to England (London: Frank Cass & Co., Ltd., 1969), Chapter 6. 46. Simon Kuznets, “Immigration of Russian Jews to the United States: Background and Structure,” Perspectives in American History, Vol. IX (1975), p. 39. 47. Donald L. Horowitz, Ethnic Groups in Conflict (Berkeley: University of California Press, 1985), pp. 176–177. 48. Hugh LeCaine Agnew, Origins of the Czech National Renascence (Pittsburgh: University of Pittsburgh Press, 1993), p. 51. 49.


pages: 593 words: 183,240

An Economic History of the Twentieth Century by J. Bradford Delong

affirmative action, Alan Greenspan, Andrei Shleifer, ASML, asset-backed security, Ayatollah Khomeini, banking crisis, Bear Stearns, Bretton Woods, British Empire, business cycle, buy and hold, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, centre right, collapse of Lehman Brothers, collective bargaining, colonial rule, coronavirus, cotton gin, COVID-19, creative destruction, crowdsourcing, cryptocurrency, cuban missile crisis, deindustrialization, demographic transition, Deng Xiaoping, Donald Trump, en.wikipedia.org, ending welfare as we know it, endogenous growth, Fairchild Semiconductor, fake news, financial deregulation, financial engineering, financial repression, flying shuttle, Ford Model T, Ford paid five dollars a day, Francis Fukuyama: the end of history, full employment, general purpose technology, George Gilder, German hyperinflation, global value chain, Great Leap Forward, Gunnar Myrdal, Haber-Bosch Process, Hans Rosling, hedonic treadmill, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, housing crisis, Hyman Minsky, income inequality, income per capita, industrial research laboratory, interchangeable parts, Internet Archive, invention of agriculture, invention of the steam engine, It's morning again in America, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kenneth Rogoff, labor-force participation, land reform, late capitalism, Les Trente Glorieuses, liberal capitalism, liquidity trap, Long Term Capital Management, low interest rates, manufacturing employment, market bubble, means of production, megacity, Menlo Park, Mikhail Gorbachev, mortgage debt, mutually assured destruction, Neal Stephenson, occupational segregation, oil shock, open borders, open economy, Paul Samuelson, Pearl River Delta, Phillips curve, plutocrats, price stability, Productivity paradox, profit maximization, public intellectual, quantitative easing, Ralph Waldo Emerson, restrictive zoning, rising living standards, road to serfdom, Robert Gordon, Robert Solow, rolodex, Ronald Coase, Ronald Reagan, savings glut, secular stagnation, Silicon Valley, Simon Kuznets, social intelligence, Stanislav Petrov, strikebreaker, structural adjustment programs, Suez canal 1869, surveillance capitalism, The Bell Curve by Richard Herrnstein and Charles Murray, The Chicago School, The Great Moderation, The Nature of the Firm, The Rise and Fall of American Growth, too big to fail, transaction costs, transatlantic slave trade, transcontinental railway, TSMC, union organizing, vertical integration, W. E. B. Du Bois, Wayback Machine, Yom Kippur War

There were then in 1870 1.3 billion people alive, 2.6 times as many as there had been in 1500. Farm sizes were only two-fifths as large, on average, as they had been in 1500, canceling out the overwhelming bulk of technological improvement, as far as typical human living standards were concerned. Around 1870 we crossed over another divide into yet another new watershed: the age Simon Kuznets called an era of “modern economic growth.”24 During the period that would follow, the long twentieth century, there came an explosion. The approximately seven billion people in 2010 had a global value of knowledge index of 21. Pause to marvel. The value of knowledge about technology and organization had grown at an average rate of 2.1 percent per year.

Madeleine Albright, Fascism: A Warning, New York: HarperCollins, 2018. 21. Fred Block, “Introduction,” in Karl Polanyi, Great Transformation. 22. See Charles I. Jones, “Paul Romer: Ideas, Nonrivalry, and Endogenous Growth,” Scandinavian Journal of Economics 121, no. 3 (2019): 859–883. 23. Clark, Farewell, 91–96. 24. Simon Kuznets, Modern Economic Growth: Rate, Structure, and Spread, New Haven, CT: Yale University Press, 1966. 25. Edward Shorter and Lawrence Shorter, A History of Women’s Bodies, New York: Basic Books, 1982. Consider that one in seven of the queens and heiresses apparent of England between William I of Normandy and Victoria of Hanover died in childbed. 26.


Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages by Carlota Pérez

agricultural Revolution, Alan Greenspan, Big bang: deregulation of the City of London, Bob Noyce, Bretton Woods, business cycle, capital controls, commoditize, Corn Laws, creative destruction, David Ricardo: comparative advantage, deindustrialization, distributed generation, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, Ford Model T, full employment, Hyman Minsky, informal economy, joint-stock company, Joseph Schumpeter, junk bonds, knowledge economy, late capitalism, market fundamentalism, military-industrial complex, new economy, nuclear winter, offshore financial centre, post-industrial society, profit motive, railway mania, Robert Shiller, Sand Hill Road, satellite internet, scientific management, Silicon Valley, Simon Kuznets, South Sea Bubble, Suez canal 1869, technological determinism, The Theory of the Leisure Class by Thorstein Veblen, Thomas Kuhn: the structure of scientific revolutions, Thorstein Veblen, trade route, tulip mania, Upton Sinclair, vertical integration, Washington Consensus

Each technological revolution, then, is an explosion of new products, industries and infrastructures that gradually gives rise to a new techno-economic paradigm, which guides entrepreneurs, managers, innovators, investors and consumers, both in their individual decisions and in their interactions, for the whole period of propagation of that set of technologies. A. Five Technological Revolutions in Two Hundred Years At several moments in his thinking about development, Simon Kuznets explored the notion of epochal innovations as those capable of inducing significant changes in the direction of growth. In his Nobel lecture in 1971, he stated: The major breakthroughs in the advance of human knowledge, those that constituted the dominant sources of sustained growth over long periods and spread to a substantial part of the world, may be termed epochal innovations.


pages: 300 words: 76,638

The War on Normal People: The Truth About America's Disappearing Jobs and Why Universal Basic Income Is Our Future by Andrew Yang

3D printing, Airbnb, assortative mating, augmented reality, autonomous vehicles, basic income, Bear Stearns, behavioural economics, Ben Horowitz, Bernie Sanders, call centre, corporate governance, cryptocurrency, data science, David Brooks, DeepMind, Donald Trump, Elon Musk, falling living standards, financial deregulation, financial engineering, full employment, future of work, global reserve currency, income inequality, Internet of things, invisible hand, Jeff Bezos, job automation, John Maynard Keynes: technological unemployment, Khan Academy, labor-force participation, longitudinal study, low skilled workers, Lyft, manufacturing employment, Mark Zuckerberg, megacity, meritocracy, Narrative Science, new economy, passive income, performance metric, post-work, quantitative easing, reserve currency, Richard Florida, ride hailing / ride sharing, risk tolerance, robo advisor, Ronald Reagan, Rutger Bregman, Sam Altman, San Francisco homelessness, self-driving car, shareholder value, Silicon Valley, Simon Kuznets, single-payer health, Stephen Hawking, Steve Ballmer, supercomputer in your pocket, tech worker, technoutopianism, telemarketer, The future is already here, The Wealth of Nations by Adam Smith, traumatic brain injury, Tyler Cowen, Tyler Cowen: Great Stagnation, Uber and Lyft, uber lyft, unemployed young men, universal basic income, urban renewal, warehouse robotics, white flight, winner-take-all economy, Y Combinator

There’s a saying in business that “what gets measured gets managed for.” We need to start measuring different things. The concept of GDP and economic progress didn’t even exist until the Great Depression. It was invented so that the government could figure out how bad the economy was getting and how to make it better. The economist Simon Kuznets, upon introducing the concept of GDP to Congress in 1934, remarked that “economic welfare cannot be adequately measured unless the personal distribution of income is known. And no income measurement undertakes to estimate the reverse side of income, that is, the intensity and unpleasantness of effort going into the earning of income.


pages: 270 words: 73,485

Hubris: Why Economists Failed to Predict the Crisis and How to Avoid the Next One by Meghnad Desai

3D printing, Alan Greenspan, bank run, banking crisis, Bear Stearns, Berlin Wall, Big bang: deregulation of the City of London, Bretton Woods, BRICs, British Empire, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, correlation coefficient, correlation does not imply causation, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deindustrialization, demographic dividend, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, Fall of the Berlin Wall, financial innovation, Financial Instability Hypothesis, floating exchange rates, full employment, German hyperinflation, Glass-Steagall Act, Gunnar Myrdal, Home mortgage interest deduction, imperial preference, income inequality, inflation targeting, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, laissez-faire capitalism, liquidity trap, Long Term Capital Management, low interest rates, market bubble, market clearing, means of production, Meghnad Desai, Mexican peso crisis / tequila crisis, mortgage debt, Myron Scholes, negative equity, Northern Rock, oil shale / tar sands, oil shock, open economy, Paul Samuelson, Phillips curve, Post-Keynesian economics, price stability, purchasing power parity, pushing on a string, quantitative easing, reserve currency, rising living standards, risk/return, Robert Shiller, Robert Solow, Ronald Reagan, savings glut, secular stagnation, seigniorage, Silicon Valley, Simon Kuznets, subprime mortgage crisis, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Wealth of Nations by Adam Smith, Tobin tax, too big to fail, women in the workforce

Mitchell’s research was independently validated by the work of Joseph Kitchin (1861–1932).7 In 1923, Kitchin published his study of cycles in American and British data for 1890–1922. He found short cycles of 40 months and major cycles of between 7 and 11 years. Kitchin thus also corroborates the ten-year cycle of Juglar and Marx. Other economists such as Simon Kuznets, a Nobel Laureate, and Moses Abramovitz as well as W. Arthur Lewis, another Nobel Prize winner, discovered longer cycles of between 14 and 22 years in length. Cycles could be thus discerned in the data. But an explanation for what caused cycles remained elusive: Was it investment in house-building, or demographics?


pages: 306 words: 78,893

After the New Economy: The Binge . . . And the Hangover That Won't Go Away by Doug Henwood

"World Economic Forum" Davos, accounting loophole / creative accounting, affirmative action, Alan Greenspan, AOL-Time Warner, Asian financial crisis, barriers to entry, Benchmark Capital, book value, borderless world, Branko Milanovic, Bretton Woods, business cycle, California energy crisis, capital controls, corporate governance, corporate raider, correlation coefficient, credit crunch, deindustrialization, dematerialisation, deskilling, digital divide, electricity market, emotional labour, ending welfare as we know it, feminist movement, fulfillment center, full employment, gender pay gap, George Gilder, glass ceiling, Glass-Steagall Act, Gordon Gekko, government statistician, greed is good, half of the world's population has never made a phone call, income inequality, indoor plumbing, intangible asset, Internet Archive, job satisfaction, joint-stock company, Kevin Kelly, labor-force participation, Larry Ellison, liquidationism / Banker’s doctrine / the Treasury view, low interest rates, manufacturing employment, Mary Meeker, means of production, Michael Milken, minimum wage unemployment, Naomi Klein, new economy, occupational segregation, PalmPilot, pets.com, post-work, profit maximization, purchasing power parity, race to the bottom, Ralph Nader, rewilding, Robert Gordon, Robert Shiller, Robert Solow, rolling blackouts, Ronald Reagan, shareholder value, Silicon Valley, Simon Kuznets, statistical model, stock buybacks, structural adjustment programs, tech worker, Telecommunications Act of 1996, telemarketer, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, total factor productivity, union organizing, War on Poverty, warehouse automation, women in the workforce, working poor, zero-sum game

Real incomes across the distribution grew strongly and in parallel, -with incomes of the poorer half of the population even outgrowing those of the richer over some periods, resulting in a mild compression of the income distribution (that is, a trend toward greater equality). Of course, even at its most egalitarian postwar moment, the U.S. remained a polarized society, but it was still widely thought that something had changed to make the new arrangements permanent. In 1955, Simon Kuznets pubHshed his famous "inverted U" theory of capitalist evolution: that income inequaHty rises in the early stages of development and faUs as economies mature. Economists came to believe this as a fact of their After the New Economy .525 .500 .475 .450 .425 .4001-.375 income inequality (Cini index) U.S., 1913-2001 "science," and you still hear it from development specialists at the World Bank and in academia to excuse the vast increase in inequaUty in the Third World over the last fifteen years.


pages: 275 words: 77,955

Capitalism and Freedom by Milton Friedman

"Friedman doctrine" OR "shareholder theory", affirmative action, Berlin Wall, central bank independence, Corn Laws, Deng Xiaoping, floating exchange rates, Fractional reserve banking, full employment, invisible hand, Joseph Schumpeter, liquidity trap, market friction, minimum wage unemployment, price discrimination, rent control, road to serfdom, Ronald Reagan, secular stagnation, Simon Kuznets, the market place, The Wealth of Nations by Adam Smith, union organizing

The Virginia case is discussed in chapter vii. 6 The increased return may be only partly in a monetary form; it may also consist of non-pecuniary advantages attached to the occupation for which the vocational training fits the individual. Similarly, the occupation may have non-pecuniary disadvantages, which would have to be reckoned among the costs of the investment. 7 For a more detailed and precise statement of the considerations entering into the choice of an occupation, see Milton Friedman and Simon Kuznets, Income from Independent Professional Practice (New York: National Bureau of Economic Research, 1945), pp. 81–95, 118–37. 8 See G. S. Becker, “Underinvestment in College Education?” American Economic Review, Proceedings L (1960), 356–64; T. W. Schultz, “Investment in human Capital,” American Economic Review, LXI (1961), 1–17. 9 Despite these obstacles to fixed money loans, I am told that they have been a very common means of financing education in Sweden, where they have apparently been available at moderate rates of interest.


pages: 280 words: 74,559

Fully Automated Luxury Communism by Aaron Bastani

"Peter Beck" AND "Rocket Lab", Alan Greenspan, Anthropocene, autonomous vehicles, banking crisis, basic income, Berlin Wall, Bernie Sanders, Boston Dynamics, Bretton Woods, Brexit referendum, capital controls, capitalist realism, cashless society, central bank independence, collapse of Lehman Brothers, computer age, computer vision, CRISPR, David Ricardo: comparative advantage, decarbonisation, deep learning, dematerialisation, DIY culture, Donald Trump, double helix, driverless car, electricity market, Elon Musk, energy transition, Erik Brynjolfsson, fake news, financial independence, Francis Fukuyama: the end of history, future of work, Future Shock, G4S, general purpose technology, Geoffrey Hinton, Gregor Mendel, housing crisis, income inequality, industrial robot, Intergovernmental Panel on Climate Change (IPCC), Internet of things, Isaac Newton, James Watt: steam engine, Jeff Bezos, Jeremy Corbyn, Jevons paradox, job automation, John Markoff, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kevin Kelly, Kuiper Belt, land reform, Leo Hollis, liberal capitalism, low earth orbit, low interest rates, low skilled workers, M-Pesa, market fundamentalism, means of production, mobile money, more computing power than Apollo, new economy, off grid, pattern recognition, Peter H. Diamandis: Planetary Resources, post scarcity, post-work, price mechanism, price stability, private spaceflight, Productivity paradox, profit motive, race to the bottom, rewilding, RFID, rising living standards, Robert Solow, scientific management, Second Machine Age, self-driving car, sensor fusion, shareholder value, Silicon Valley, Simon Kuznets, Slavoj Žižek, SoftBank, stem cell, Stewart Brand, synthetic biology, technological determinism, technoutopianism, the built environment, the scientific method, The Wealth of Nations by Adam Smith, Thomas Malthus, transatlantic slave trade, Travis Kalanick, universal basic income, V2 rocket, Watson beat the top human players on Jeopardy!, We are as Gods, Whole Earth Catalog, working-age population

Given its centrality in any discussion of what kind of economic model is preferable, it’s easy to presume that the idea of GDP is as old as capitalism itself – that it was perhaps contrived by the likes of Adam Smith or David Ricardo. Yet to the contrary, it is a relatively recent development, devised by the economist Simon Kuznets in the 1930s in response to the Great Depression. It turns out that the central imperative of modern societies – that economic growth should be pursued as an end in itself – only started to reign supreme a century and a half after the Second Disruption began. Perhaps even more surprising is that scepticism of it is almost as old as the measure itself.


pages: 381 words: 78,467

100 Plus: How the Coming Age of Longevity Will Change Everything, From Careers and Relationships to Family And by Sonia Arrison

23andMe, 8-hour work day, Abraham Maslow, Albert Einstein, Anne Wojcicki, artificial general intelligence, attribution theory, Bill Joy: nanobots, bioinformatics, caloric restriction, caloric restriction, Clayton Christensen, dark matter, disruptive innovation, East Village, en.wikipedia.org, epigenetics, Frank Gehry, Googley, income per capita, indoor plumbing, Jeff Bezos, Johann Wolfgang von Goethe, Kickstarter, Larry Ellison, Law of Accelerating Returns, life extension, Nick Bostrom, personalized medicine, Peter Thiel, placebo effect, post scarcity, precautionary principle, radical life extension, Ray Kurzweil, rolodex, Silicon Valley, Silicon Valley billionaire, Simon Kuznets, Singularitarianism, smart grid, speech recognition, stem cell, Stephen Hawking, Steve Jobs, Steve Wozniak, Steven Levy, sugar pill, synthetic biology, Thomas Malthus, upwardly mobile, World Values Survey, X Prize

Princeton economists Gene Grossman and Alan Krueger made a similar argument and were among the first to demonstrate how this works in a 1991 paper about free trade.36 They showed that, although “economic growth brings an initial phase of deterioration” in environmental quality, it is “followed by a subsequent phase of improvement.”37 Such an inverted U curve is often referred to as an environmental Kuznets curve (EKC), named after economist Simon Kuznets, who argued that as incomes rise, there is an initial phase of great inequality, which is followed later by a reduction of that inequality. This theory, which won Kuznets the Nobel Prize in 1971, works in a similar way when applied to the environment. A typical EKC looks like Figure 3.4, and the actual numbers will vary depending on the environmental problems described (air pollutants, deforestation, etc.).


pages: 309 words: 78,361

Plenitude: The New Economics of True Wealth by Juliet B. Schor

Asian financial crisis, behavioural economics, big-box store, business climate, business cycle, carbon footprint, carbon tax, clean tech, Community Supported Agriculture, creative destruction, credit crunch, Daniel Kahneman / Amos Tversky, decarbonisation, degrowth, dematerialisation, demographic transition, deskilling, Edward Glaeser, en.wikipedia.org, Gini coefficient, global village, Herman Kahn, IKEA effect, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), Isaac Newton, Jevons paradox, Joseph Schumpeter, Kenneth Arrow, knowledge economy, life extension, McMansion, new economy, ocean acidification, off-the-grid, peak oil, pink-collar, post-industrial society, prediction markets, purchasing power parity, radical decentralization, ride hailing / ride sharing, Robert Shiller, sharing economy, Simon Kuznets, single-payer health, smart grid, systematic bias, systems thinking, The Chicago School, Thomas L Friedman, Thomas Malthus, too big to fail, transaction costs, Yochai Benkler, Zipcar

Few economists go all the way with the Cornucopians, but a larger number are believers in a more moderate variant of eco-optimism, which argues that growth itself will save the environment. Represented in a concept called the Environmental Kuznets Curve, it is modeled on studies of inequality carried out in the 1950s and ’60s by the economist Simon Kuznets. Kuznets saw a humpback data pattern across nations. At a given point in time, some had low levels of both income and inequality, some had more inequality and more income, and some had high incomes with low inequality. From this finding, most economists came to believe that countries must endure a growing concentration of income as they develop, but that once they become wealthy, they can buy themselves more fairness.


pages: 192

Kicking Awaythe Ladder by Ha-Joon Chang

Asian financial crisis, business cycle, central bank independence, classic study, clean water, colonial rule, Corn Laws, corporate governance, creative destruction, David Ricardo: comparative advantage, fear of failure, income inequality, income per capita, joint-stock company, joint-stock limited liability company, land bank, land reform, liberal world order, moral hazard, open economy, purchasing power parity, rent-seeking, scientific management, short selling, Simon Kuznets, tacit knowledge, The Wealth of Nations by Adam Smith, trade liberalization, Washington Consensus

Ely subsequently influenced the American Institutionalist School through his disciple, John Commons.19 Ely was one of the founding fathers of the American Economic Association(AEA); to this day, the biggest public lecture at the Association's annual meeting is given in Ely's name, although few of the present AEA members would know who he was. After the Second World War, when the development of post-colonial countries became a major issue, the historical approach was deployed very successfully by many founding fathers of 'development economics'.20 The likes of Arthur Lewis, Walt Rostow and Simon Kuznets formulated their theories of the 'stages' of economic development on the basis of their extensive knowledge of the history of industrialization in developed countries.21 Also influential was the 'late development' thesis of the Russian-born American economic historian, Alexander Gerschenkron, who, drawing on European experiences of industrialization, argued that the continuously increasing scale of technology would make it necessary for countries embarking on industrialization to deploy more powerful institutional vehicles in order to mobilise industrial financing.


pages: 333 words: 76,990

The Long Good Buy: Analysing Cycles in Markets by Peter Oppenheimer

Alan Greenspan, asset allocation, banking crisis, banks create money, barriers to entry, behavioural economics, benefit corporation, Berlin Wall, Big bang: deregulation of the City of London, Black Monday: stock market crash in 1987, book value, Bretton Woods, business cycle, buy and hold, Cass Sunstein, central bank independence, collective bargaining, computer age, credit crunch, data science, debt deflation, decarbonisation, diversification, dividend-yielding stocks, equity premium, equity risk premium, Fall of the Berlin Wall, financial engineering, financial innovation, fixed income, Flash crash, foreign exchange controls, forward guidance, Francis Fukuyama: the end of history, general purpose technology, gentrification, geopolitical risk, George Akerlof, Glass-Steagall Act, household responsibility system, housing crisis, index fund, invention of the printing press, inverted yield curve, Isaac Newton, James Watt: steam engine, Japanese asset price bubble, joint-stock company, Joseph Schumpeter, Kickstarter, Kondratiev cycle, liberal capitalism, light touch regulation, liquidity trap, Live Aid, low interest rates, market bubble, Mikhail Gorbachev, mortgage debt, negative equity, Network effects, new economy, Nikolai Kondratiev, Nixon shock, Nixon triggered the end of the Bretton Woods system, oil shock, open economy, Phillips curve, price stability, private sector deleveraging, Productivity paradox, quantitative easing, railway mania, random walk, Richard Thaler, risk free rate, risk tolerance, risk-adjusted returns, Robert Shiller, Robert Solow, Ronald Reagan, Savings and loan crisis, savings glut, secular stagnation, Shenzhen special economic zone , Simon Kuznets, South Sea Bubble, special economic zone, stocks for the long run, tail risk, Tax Reform Act of 1986, technology bubble, The Great Moderation, too big to fail, total factor productivity, trade route, tulip mania, yield curve

Interest in economic cycles, and their impact on financial markets and prices, has a long history and there are many theories on how they function. The Kitchin cycle, after Joseph Kitchin (1861–1932), is based on a 40-month duration, driven by commodities and inventories. The Juglar cycle is used to predict capital investment (Clement Juglar, 1819–1905) and has a duration of 7–11 years, whereas the Kuznets cycle for predicting incomes (Simon Kuznets, 1901–1985) has a duration of 15–25 years and the Kondratiev cycle (Nikolai Kondratiev, 1892–1938) has a duration of 50–60 years, driven by major technological innovations. There are, clearly, problems with all of them and the fact that there are so many different descriptions of cycles points to the fact that there are many different drivers.


pages: 775 words: 208,604

The Great Leveler: Violence and the History of Inequality From the Stone Age to the Twenty-First Century by Walter Scheidel

agricultural Revolution, assortative mating, basic income, Berlin Wall, Bernie Sanders, Branko Milanovic, British Empire, capital controls, Capital in the Twenty-First Century by Thomas Piketty, classic study, collective bargaining, colonial rule, Columbian Exchange, conceptual framework, confounding variable, corporate governance, cosmological principle, CRISPR, crony capitalism, dark matter, declining real wages, democratizing finance, demographic transition, Dissolution of the Soviet Union, Downton Abbey, Edward Glaeser, failed state, Fall of the Berlin Wall, financial deregulation, fixed income, Francisco Pizarro, full employment, Gini coefficient, global pandemic, Great Leap Forward, guns versus butter model, hiring and firing, income inequality, John Markoff, knowledge worker, land reform, land tenure, low skilled workers, means of production, mega-rich, Network effects, nuclear winter, offshore financial centre, plutocrats, race to the bottom, recommendation engine, rent control, rent-seeking, road to serfdom, Robert Gordon, Ronald Reagan, Second Machine Age, Simon Kuznets, synthetic biology, The Future of Employment, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Malthus, transaction costs, transatlantic slave trade, universal basic income, very high income, working-age population, zero-sum game

However, although information on housing inequality derived from house-tax data and reported wages has been marshaled to show that incomes continued to become more unequal during the first half of the nineteenth century as well, it remains controversial how much weight this particular material can bear.26 Figure 3.4Inequality trends in Latin America in the long run This is even more true of an earlier notion that various indicators of inequality rose during the first half or two-thirds of the nineteenth century and subsequently declined until the 1910s, producing a gently inverted U-curve that would be compatible with the economist Simon Kuznets’s idea that economic modernization might first increase and then lower inequality within a society in transition. The observation that wage dispersal grew between 1815 and 1851, peaked in the 1850s and 1860s, and subsequently declined until 1911 may be an artifact of the underlying data for different professions, which exhibit contradictory trends.

Considering the severity of these transformative shocks and the multifaceted nature of their effect on overall social, political, and economic development, the question of how much subsequent levels of inequality were determined by economic growth and per capita output as such would seem rather meaningless.2 In the following, I explore the contribution of economic development to income inequality in two ways: by considering claims that per capita GDP per se is systematically correlated with inequality measures and by focusing on parts of the world that were not involved in the violent dislocations from 1914 to 1945—or up to the 1970s if we include communist revolutions in Asia—or, more precisely, that were not as directly involved in them as were most rich Western countries and large parts of Asia: Africa, the Middle East, and, above all, Latin America. We owe the classic formulation of the idea that income inequality is linked to and driven by economic development to economics Nobel laureate Simon Kuznets. Back in the 1950s, Kuznets, a pioneer in the study of income disparities in the United States, proposed a deliberately simple model. Economic advances beyond the traditional agrarian mode initially raise inequality if mean incomes are higher—and perhaps also more unevenly distributed—in cities than in the countryside, and urbanization increases the urban share of the population and the weight of the urban sector in the national economy, thereby inflating income differentials and also overall inequality.


pages: 411 words: 80,925

What's Mine Is Yours: How Collaborative Consumption Is Changing the Way We Live by Rachel Botsman, Roo Rogers

"World Economic Forum" Davos, Abraham Maslow, Airbnb, Apollo 13, barriers to entry, behavioural economics, Bernie Madoff, bike sharing, Buckminster Fuller, business logic, buy and hold, carbon footprint, Cass Sunstein, collaborative consumption, collaborative economy, commoditize, Community Supported Agriculture, credit crunch, crowdsourcing, dematerialisation, disintermediation, en.wikipedia.org, experimental economics, Ford Model T, Garrett Hardin, George Akerlof, global village, hedonic treadmill, Hugh Fearnley-Whittingstall, information retrieval, intentional community, iterative process, Kevin Kelly, Kickstarter, late fees, Mark Zuckerberg, market design, Menlo Park, Network effects, new economy, new new economy, out of africa, Paradox of Choice, Parkinson's law, peer-to-peer, peer-to-peer lending, peer-to-peer rental, planned obsolescence, Ponzi scheme, pre–internet, public intellectual, recommendation engine, RFID, Richard Stallman, ride hailing / ride sharing, Robert Shiller, Ronald Coase, Search for Extraterrestrial Intelligence, SETI@home, Simon Kuznets, Skype, slashdot, smart grid, South of Market, San Francisco, Stewart Brand, systems thinking, TED Talk, the long tail, The Nature of the Firm, The Spirit Level, the strength of weak ties, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thorstein Veblen, Torches of Freedom, Tragedy of the Commons, transaction costs, traveling salesman, ultimatum game, Victor Gruen, web of trust, women in the workforce, work culture , Yochai Benkler, Zipcar

The United States and the European Union account for approximately one-third of this amount. The simplicity of the measurement of GDP is also its downfall. The argument against GDP fetishism is that we are more than what we make. Even the inventor of the GDP, the late Russian-American economist Simon Kuznets, was aware that the model of GDP had significant shortcomings. “The welfare of a nation can scarcely be inferred from a measure of national income,” he said in 1934. Imagine walking into a cocktail party and instead of making casual conversation everyone asked, “How much money do you make?” At the very least you would find it embarrassingly gauche, but you probably also would be somewhat offended.


pages: 472 words: 80,835

Life as a Passenger: How Driverless Cars Will Change the World by David Kerrigan

3D printing, Airbnb, airport security, Albert Einstein, autonomous vehicles, big-box store, Boeing 747, butterfly effect, call centre, car-free, Cesare Marchetti: Marchetti’s constant, Chris Urmson, commoditize, computer vision, congestion charging, connected car, DARPA: Urban Challenge, data science, deep learning, DeepMind, deskilling, disruptive innovation, Donald Shoup, driverless car, edge city, Elon Musk, en.wikipedia.org, fake news, Ford Model T, future of work, General Motors Futurama, hype cycle, invention of the wheel, Just-in-time delivery, Lewis Mumford, loss aversion, Lyft, Marchetti’s constant, Mars Rover, megacity, Menlo Park, Metcalfe’s law, Minecraft, Nash equilibrium, New Urbanism, QWERTY keyboard, Ralph Nader, RAND corporation, Ray Kurzweil, ride hailing / ride sharing, Rodney Brooks, Sam Peltzman, self-driving car, sensor fusion, Silicon Valley, Simon Kuznets, smart cities, Snapchat, Stanford marshmallow experiment, Steve Jobs, technological determinism, technoutopianism, TED Talk, the built environment, Thorstein Veblen, traffic fines, transit-oriented development, Travis Kalanick, trolley problem, Uber and Lyft, Uber for X, uber lyft, Unsafe at Any Speed, urban planning, urban sprawl, warehouse robotics, Yogi Berra, young professional, zero-sum game, Zipcar

They made them, they went out there, and society eventually realized its value." Chapter 8 - The Driverless Dividend “The major breakthroughs in the advance of human knowledge, those that constitute the dominant sources of sustained growth over long periods and spread to a substantial part of the world, may be termed epochal innovations” Simon Kuznet’s Nobel lecture, 1971 The course of human civilization has been shaped by transportation for millennia. The Romans would not have expanded across Europe without the paved roadway, the Mongols could not have conquered Asia without the horse, America would not have grown inexorably without the train, and modern trade would not be possible without container ships and jet airliners.


pages: 304 words: 80,143

The Autonomous Revolution: Reclaiming the Future We’ve Sold to Machines by William Davidow, Michael Malone

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, agricultural Revolution, Airbnb, AlphaGo, American Society of Civil Engineers: Report Card, Automated Insights, autonomous vehicles, basic income, benefit corporation, bitcoin, blockchain, blue-collar work, Bob Noyce, business process, call centre, Cambridge Analytica, cashless society, citizen journalism, Clayton Christensen, collaborative consumption, collaborative economy, collective bargaining, creative destruction, crowdsourcing, cryptocurrency, deep learning, DeepMind, disintermediation, disruptive innovation, distributed ledger, en.wikipedia.org, Erik Brynjolfsson, fake news, Filter Bubble, Ford Model T, Francis Fukuyama: the end of history, general purpose technology, Geoffrey West, Santa Fe Institute, gig economy, Gini coefficient, high-speed rail, holacracy, Hyperloop, income inequality, industrial robot, Internet of things, invention of agriculture, invention of movable type, invention of the printing press, invisible hand, Jane Jacobs, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, license plate recognition, low interest rates, Lyft, Mark Zuckerberg, mass immigration, Network effects, new economy, peer-to-peer lending, QWERTY keyboard, ransomware, Richard Florida, Robert Gordon, robo advisor, Ronald Reagan, Second Machine Age, self-driving car, sharing economy, Shoshana Zuboff, Silicon Valley, Simon Kuznets, Skinner box, Snapchat, speech recognition, streetcar suburb, Stuxnet, surveillance capitalism, synthetic biology, TaskRabbit, The Death and Life of Great American Cities, The Rise and Fall of American Growth, the scientific method, trade route, Turing test, two and twenty, Uber and Lyft, uber lyft, universal basic income, uranium enrichment, urban planning, vertical integration, warehouse automation, zero day, zero-sum game, Zipcar

Suppose low-cost virtual travel substitutes for going there. Suppose you can get rid of your car because work and shopping come to you. Well, in those cases you might be able to live better on less income. In a world in which everything else is being redefined, our definitions of quality of life have to change as well. Simon Kuznets, who developed a system of national accounts, is considered to be the father of GDP. He received the Nobel Prize in Economics for his work, which took place during the 1930s. During that time, Presidents Hoover and Roosevelt were working to combat the Great Depression but had only fragments of indirect data, such as freight car loadings and stock prices, with which to evaluate the effectiveness of their new policies.36 The measurement schemes Kuznets devised helped them develop more finely honed approaches.


pages: 295 words: 87,204

The Capitalist Manifesto by Johan Norberg

AltaVista, anti-communist, barriers to entry, Berlin Wall, Bernie Sanders, Big Tech, Boris Johnson, business climate, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, carbon tax, Charles Babbage, computer age, coronavirus, COVID-19, creative destruction, crony capitalism, data is not the new oil, data is the new oil, David Graeber, DeepMind, degrowth, deindustrialization, Deng Xiaoping, digital map, disinformation, Donald Trump, Elon Musk, energy transition, Erik Brynjolfsson, export processing zone, failed state, Filter Bubble, friendshoring, gig economy, Gini coefficient, global supply chain, Google Glasses, Greta Thunberg, Gunnar Myrdal, Hans Rosling, Hernando de Soto, Howard Zinn, income inequality, independent contractor, index fund, Indoor air pollution, industrial robot, Intergovernmental Panel on Climate Change (IPCC), invention of the printing press, invisible hand, Jeff Bezos, Jeremy Corbyn, job automation, job satisfaction, Joseph Schumpeter, land reform, liberal capitalism, lockdown, low cost airline, low interest rates, low skilled workers, Lyft, manufacturing employment, Mark Zuckerberg, means of production, meta-analysis, Minecraft, multiplanetary species, Naomi Klein, Neal Stephenson, Nelson Mandela, Network effects, open economy, passive income, Paul Graham, Paul Samuelson, payday loans, planned obsolescence, precariat, profit motive, Ralph Nader, RAND corporation, rent control, rewilding, ride hailing / ride sharing, Ronald Coase, Rosa Parks, Salesforce, Sam Bankman-Fried, Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, Snapchat, social distancing, social intelligence, South China Sea, Stephen Fry, Steve Jobs, tech billionaire, The Spirit Level, The Wealth of Nations by Adam Smith, TikTok, Tim Cook: Apple, total factor productivity, trade liberalization, transatlantic slave trade, Tyler Cowen, Uber and Lyft, uber lyft, ultimatum game, Virgin Galactic, Washington Consensus, working-age population, World Values Survey, X Prize, you are the product, zero-sum game

The EPI concludes that ‘environmental performance correlates strongly with a country’s wealth’, although there are also countries at each level of prosperity that perform both better and worse.25 In the literature there is a discussion about a possible ‘Kuznets curve’ for the environment. Many forms of environmental degradation follow the pattern of a ‘U’ turned upside-down, a shape that the economist Simon Kuznets had previously used to describe the relationship between growth and inequality. As countries begin to urbanize and industrialize, the damage to nature and health increases rapidly, but after a certain point increased income is associated with environmental improvements. The hypothesis is controversial and many researchers object that there is no automatic connection and that it does not apply to all forms of environmental damage.


pages: 327 words: 90,542

The Age of Stagnation: Why Perpetual Growth Is Unattainable and the Global Economy Is in Peril by Satyajit Das

"there is no alternative" (TINA), "World Economic Forum" Davos, 9 dash line, accounting loophole / creative accounting, additive manufacturing, Airbnb, Alan Greenspan, Albert Einstein, Alfred Russel Wallace, Anthropocene, Anton Chekhov, Asian financial crisis, banking crisis, Bear Stearns, Berlin Wall, bitcoin, bond market vigilante , Bretton Woods, BRICs, British Empire, business cycle, business process, business process outsourcing, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Carmen Reinhart, Clayton Christensen, cloud computing, collaborative economy, colonial exploitation, computer age, creative destruction, cryptocurrency, currency manipulation / currency intervention, David Ricardo: comparative advantage, declining real wages, Deng Xiaoping, deskilling, digital divide, disintermediation, disruptive innovation, Downton Abbey, Emanuel Derman, energy security, energy transition, eurozone crisis, financial engineering, financial innovation, financial repression, forward guidance, Francis Fukuyama: the end of history, full employment, geopolitical risk, gig economy, Gini coefficient, global reserve currency, global supply chain, Goldman Sachs: Vampire Squid, Great Leap Forward, Greenspan put, happiness index / gross national happiness, high-speed rail, Honoré de Balzac, hydraulic fracturing, Hyman Minsky, illegal immigration, income inequality, income per capita, indoor plumbing, informal economy, Innovator's Dilemma, intangible asset, Intergovernmental Panel on Climate Change (IPCC), it is difficult to get a man to understand something, when his salary depends on his not understanding it, It's morning again in America, Jane Jacobs, John Maynard Keynes: technological unemployment, junk bonds, Kenneth Rogoff, Kevin Roose, knowledge economy, knowledge worker, Les Trente Glorieuses, light touch regulation, liquidity trap, Long Term Capital Management, low interest rates, low skilled workers, Lyft, Mahatma Gandhi, margin call, market design, Marshall McLuhan, Martin Wolf, middle-income trap, Mikhail Gorbachev, military-industrial complex, Minsky moment, mortgage debt, mortgage tax deduction, new economy, New Urbanism, offshore financial centre, oil shale / tar sands, oil shock, old age dependency ratio, open economy, PalmPilot, passive income, peak oil, peer-to-peer lending, pension reform, planned obsolescence, plutocrats, Ponzi scheme, Potemkin village, precariat, price stability, profit maximization, pushing on a string, quantitative easing, race to the bottom, Ralph Nader, Rana Plaza, rent control, rent-seeking, reserve currency, ride hailing / ride sharing, rising living standards, risk/return, Robert Gordon, Robert Solow, Ronald Reagan, Russell Brand, Satyajit Das, savings glut, secular stagnation, seigniorage, sharing economy, Silicon Valley, Simon Kuznets, Slavoj Žižek, South China Sea, sovereign wealth fund, Stephen Fry, systems thinking, TaskRabbit, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the market place, the payments system, The Spirit Level, Thorstein Veblen, Tim Cook: Apple, too big to fail, total factor productivity, trade route, transaction costs, uber lyft, unpaid internship, Unsafe at Any Speed, Upton Sinclair, Washington Consensus, We are the 99%, WikiLeaks, Y2K, Yom Kippur War, zero-coupon bond, zero-sum game

Since 2008, China's headline growth of around 8 percent has been driven by investment funded by new bank lending, from state-controlled banks, averaging around 30–40 percent of GDP. Some 10–20 percent of these loans may prove incapable of being repaid, amounting to losses of 3–8 percent of GDP. If these losses are correctly accounted for by writing them off against income, Chinese growth is much lower. Economist Simon Kuznets, who formulated the concept of GDP, cautioned against an over-simplified quantitative measurement providing a misleading illusion of precision. Senator Robert Kennedy gave the most eloquent criticism of GDP, highlighting distinctions between quantity and quality of growth: Our gross national product…if we should judge America by that—counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage.


pages: 303 words: 93,545

I'm a stranger here myself: notes on returning to America after twenty years away by Bill Bryson

flying shuttle, illegal immigration, millennium bug, National Debt Clock, Ronald Reagan, Simon Kuznets, telemarketer

What is interesting is that it is becoming increasingly evident that most of these inconceivably vast sums that get bandied about by economists and policy makers are almost certainly miles out anyway. Take gross domestic product, the bedrock of modern economic policy. GDP was a concept that was originated in the 1930s by the economist Simon Kuznets. It is very good at measuring physical things—tons of steel, board feet of lumber, potatoes, tires, and so on. That was all very well in a traditional industrial economy. But now the greater part of output for nearly all developed nations is in services and ideas—things like computer software, telecommunications, financial services—which produce wealth but don’t necessarily, or even generally, result in a product that you can load on a pallet and ship out to the marketplace.


pages: 340 words: 91,387

Stealth of Nations by Robert Neuwirth

accounting loophole / creative accounting, big-box store, British Empire, call centre, collective bargaining, corporate governance, digital divide, full employment, Hernando de Soto, illegal immigration, income inequality, independent contractor, informal economy, invisible hand, Jane Jacobs, jitney, Johannes Kepler, joint-stock company, Joseph Schumpeter, megacity, microcredit, New Urbanism, off-the-grid, Pepto Bismol, pirate software, planned obsolescence, profit motive, Shenzhen special economic zone , Shenzhen was a fishing village, Simon Kuznets, special economic zone, The Wealth of Nations by Adam Smith, thinkpad, upwardly mobile, Vilfredo Pareto, yellow journalism

Unlike Proudhon and Gesell, Keynes offered no utopian solution (though he did credit Mandeville and Gesell as being among the “brave army of heretics” who called into question traditional economic nostrums) and he didn’t suggest that all inequities should be abolished, just that the size of the differential should be limited. “There is social and psychological justification for significant inequalities of incomes and wealth,” he wrote, “but not for such large disparities as exist today.” Simon Kuznets, the great modern explicator of inequality, won the Nobel Prize in economics in 1971 for his work suggesting that inequality starts out as relatively minor in agricultural society, grows massively with industrialization, but tends to lessen in the later stages of industrial development. (As a modern example of how this might work, Bill Gates and Warren Buffett are both fabulously wealthy, but the difference between their assets and the wealth of the average American of today is likely less than the gap that existed between John D.


pages: 339 words: 88,732

The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies by Erik Brynjolfsson, Andrew McAfee

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, access to a mobile phone, additive manufacturing, Airbnb, Alan Greenspan, Albert Einstein, Amazon Mechanical Turk, Amazon Web Services, American Society of Civil Engineers: Report Card, Any sufficiently advanced technology is indistinguishable from magic, autonomous vehicles, barriers to entry, basic income, Baxter: Rethink Robotics, Boston Dynamics, British Empire, business cycle, business intelligence, business process, call centre, carbon tax, Charles Lindbergh, Chuck Templeton: OpenTable:, clean water, combinatorial explosion, computer age, computer vision, congestion charging, congestion pricing, corporate governance, cotton gin, creative destruction, crowdsourcing, data science, David Ricardo: comparative advantage, digital map, driverless car, employer provided health coverage, en.wikipedia.org, Erik Brynjolfsson, factory automation, Fairchild Semiconductor, falling living standards, Filter Bubble, first square of the chessboard / second half of the chessboard, Frank Levy and Richard Murnane: The New Division of Labor, Freestyle chess, full employment, G4S, game design, general purpose technology, global village, GPS: selective availability, Hans Moravec, happiness index / gross national happiness, illegal immigration, immigration reform, income inequality, income per capita, indoor plumbing, industrial robot, informal economy, intangible asset, inventory management, James Watt: steam engine, Jeff Bezos, Jevons paradox, jimmy wales, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kevin Kelly, Khan Academy, Kiva Systems, knowledge worker, Kodak vs Instagram, law of one price, low skilled workers, Lyft, Mahatma Gandhi, manufacturing employment, Marc Andreessen, Mark Zuckerberg, Mars Rover, mass immigration, means of production, Narrative Science, Nate Silver, natural language processing, Network effects, new economy, New Urbanism, Nicholas Carr, Occupy movement, oil shale / tar sands, oil shock, One Laptop per Child (OLPC), pattern recognition, Paul Samuelson, payday loans, post-work, power law, price stability, Productivity paradox, profit maximization, Ralph Nader, Ray Kurzweil, recommendation engine, Report Card for America’s Infrastructure, Robert Gordon, Robert Solow, Rodney Brooks, Ronald Reagan, search costs, Second Machine Age, self-driving car, sharing economy, Silicon Valley, Simon Kuznets, six sigma, Skype, software patent, sovereign wealth fund, speech recognition, statistical model, Steve Jobs, Steven Pinker, Stuxnet, supply-chain management, TaskRabbit, technological singularity, telepresence, The Bell Curve by Richard Herrnstein and Charles Murray, the Cathedral and the Bazaar, the long tail, The Signal and the Noise by Nate Silver, The Wealth of Nations by Adam Smith, total factor productivity, transaction costs, Tyler Cowen, Tyler Cowen: Great Stagnation, Vernor Vinge, warehouse robotics, Watson beat the top human players on Jeopardy!, winner-take-all economy, Y2K

He had to rely on scattered data like freight car loadings, commodity prices, and stock price indexes that gave only an incomplete and often unreliable view of economic activity. The first set of national accounts was presented to Congress in 1937 based on the pioneering work of Nobel Prize winner Simon Kuznets, who worked with researchers at the National Bureau of Economic Research and a team at the U.S. Department of Commerce. The resulting set of metrics have served as beacons that helped illuminate many of the dramatic changes that transformed the economy throughout the twentieth century. But as the economy has changed so, too, must our metrics.


pages: 976 words: 235,576

The Meritocracy Trap: How America's Foundational Myth Feeds Inequality, Dismantles the Middle Class, and Devours the Elite by Daniel Markovits

8-hour work day, activist fund / activist shareholder / activist investor, affirmative action, algorithmic management, Amazon Robotics, Anton Chekhov, asset-backed security, assortative mating, basic income, Bernie Sanders, big-box store, business cycle, capital asset pricing model, Capital in the Twenty-First Century by Thomas Piketty, Carl Icahn, carried interest, collateralized debt obligation, collective bargaining, compensation consultant, computer age, corporate governance, corporate raider, crony capitalism, David Brooks, deskilling, Detroit bankruptcy, disruptive innovation, Donald Trump, Edward Glaeser, Emanuel Derman, equity premium, European colonialism, everywhere but in the productivity statistics, fear of failure, financial engineering, financial innovation, financial intermediation, fixed income, Ford paid five dollars a day, Frederick Winslow Taylor, fulfillment center, full employment, future of work, gender pay gap, gentrification, George Akerlof, Gini coefficient, glass ceiling, Glass-Steagall Act, Greenspan put, helicopter parent, Herbert Marcuse, high net worth, hiring and firing, income inequality, industrial robot, interchangeable parts, invention of agriculture, Jaron Lanier, Jeff Bezos, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, junk bonds, Kevin Roose, Kiva Systems, knowledge economy, knowledge worker, Kodak vs Instagram, labor-force participation, Larry Ellison, longitudinal study, low interest rates, low skilled workers, machine readable, manufacturing employment, Mark Zuckerberg, Martin Wolf, mass incarceration, medical residency, meritocracy, minimum wage unemployment, Myron Scholes, Nate Silver, New Economic Geography, new economy, offshore financial centre, opioid epidemic / opioid crisis, Paul Samuelson, payday loans, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, precariat, purchasing power parity, rent-seeking, Richard Florida, Robert Gordon, Robert Shiller, Robert Solow, Ronald Reagan, Rutger Bregman, savings glut, school choice, shareholder value, Silicon Valley, Simon Kuznets, six sigma, Skype, stakhanovite, stem cell, Stephen Fry, Steve Jobs, stock buybacks, supply-chain management, telemarketer, The Bell Curve by Richard Herrnstein and Charles Murray, The Theory of the Leisure Class by Thorstein Veblen, Thomas Davenport, Thorstein Veblen, too big to fail, total factor productivity, transaction costs, traveling salesman, universal basic income, unpaid internship, Vanguard fund, War on Poverty, warehouse robotics, Winter of Discontent, women in the workforce, work culture , working poor, Yochai Benkler, young professional, zero-sum game

Goldin and Katz summarize the contrasting eras: “The movement from artisanal production to factories in the nineteenth century involved the substitution of capital and unskilled labor for skilled (artisanal) labor, while the adoption of continuous-process and unit drive methods in the twentieth century involved the substitution of capital and skilled (educated) labor for unskilled labor.” Goldin and Katz, The Race Between Education and Technology, 125. “a decrease in the fraction”: See Joseph J. Spengler, “Changes in Income Distribution and Social Stratification: A Note,” American Journal of Sociology 59, no. 3 (November 1953): 247. Simon Kuznets famously held a similar view. Simon Kuznets, “Economic Growth and Income Inequality,” American Economic Review 45, no. 1 (March 1955): 1. See also Jeffrey Winters and Benjamin Page, “Oligarchy in the United States?,” Perspectives on Politics 7, no. 4 (December 2009): 731. now opposes economic equality: A common view treats technology’s forward march as a brute fact to which social and economic life must adjust, but that society cannot aspire to control, and for which society cannot be held to account.


pages: 436 words: 98,538

The Upside of Inequality by Edward Conard

affirmative action, Affordable Care Act / Obamacare, agricultural Revolution, Alan Greenspan, Albert Einstein, assortative mating, bank run, Berlin Wall, book value, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Climatic Research Unit, cloud computing, corporate governance, creative destruction, Credit Default Swap, crony capitalism, disruptive innovation, diversified portfolio, Donald Trump, en.wikipedia.org, Erik Brynjolfsson, Fall of the Berlin Wall, full employment, future of work, Gini coefficient, illegal immigration, immigration reform, income inequality, informal economy, information asymmetry, intangible asset, Intergovernmental Panel on Climate Change (IPCC), invention of the telephone, invisible hand, Isaac Newton, Jeff Bezos, Joseph Schumpeter, Kenneth Rogoff, Kodak vs Instagram, labor-force participation, Larry Ellison, liquidity trap, longitudinal study, low interest rates, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, mass immigration, means of production, meta-analysis, new economy, offshore financial centre, paradox of thrift, Paul Samuelson, pushing on a string, quantitative easing, randomized controlled trial, risk-adjusted returns, Robert Gordon, Ronald Reagan, Second Machine Age, secular stagnation, selection bias, Silicon Valley, Simon Kuznets, Snapchat, Steve Jobs, survivorship bias, The Rise and Fall of American Growth, total factor productivity, twin studies, Tyler Cowen, Tyler Cowen: Great Stagnation, University of East Anglia, upwardly mobile, War on Poverty, winner-take-all economy, women in the workforce, working poor, working-age population, zero-sum game

As marginal producers raise their productivity—what economists call their marginal product of labor—to survive, wages rise. Under these conditions, competition for workers seems to lead to a never-ending spiral of productivity improvements and wage increases. These circumstances led economists to believe that income inequality narrows as countries grow richer—what economists call a Kuznets curve, after Simon Kuznets, the economist who theorized it. In agrarian economies, where a small cabal of landowners initially controls the means of production, industrialization of those economies often broadens ownership of the means of production and raises wages, which narrows income inequality. Similarly, where a broad base of uneducated talent becomes educated, income inequality again may narrow.


pages: 443 words: 98,113

The Corruption of Capitalism: Why Rentiers Thrive and Work Does Not Pay by Guy Standing

"World Economic Forum" Davos, 3D printing, Airbnb, Alan Greenspan, Albert Einstein, Amazon Mechanical Turk, anti-fragile, Asian financial crisis, asset-backed security, bank run, banking crisis, basic income, Ben Bernanke: helicopter money, Bernie Sanders, Big bang: deregulation of the City of London, Big Tech, bilateral investment treaty, Bonfire of the Vanities, Boris Johnson, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, carried interest, cashless society, central bank independence, centre right, Clayton Christensen, collapse of Lehman Brothers, collective bargaining, commons-based peer production, credit crunch, crony capitalism, cross-border payments, crowdsourcing, debt deflation, declining real wages, deindustrialization, disruptive innovation, Doha Development Round, Donald Trump, Double Irish / Dutch Sandwich, ending welfare as we know it, eurozone crisis, Evgeny Morozov, falling living standards, financial deregulation, financial innovation, Firefox, first-past-the-post, future of work, Garrett Hardin, gentrification, gig economy, Goldman Sachs: Vampire Squid, Greenspan put, Growth in a Time of Debt, housing crisis, income inequality, independent contractor, information retrieval, intangible asset, invention of the steam engine, investor state dispute settlement, it's over 9,000, James Watt: steam engine, Jeremy Corbyn, job automation, John Maynard Keynes: technological unemployment, labour market flexibility, light touch regulation, Long Term Capital Management, low interest rates, lump of labour, Lyft, manufacturing employment, Mark Zuckerberg, market clearing, Martin Wolf, means of production, megaproject, mini-job, Money creation, Mont Pelerin Society, moral hazard, mortgage debt, mortgage tax deduction, Neil Kinnock, non-tariff barriers, North Sea oil, Northern Rock, nudge unit, Occupy movement, offshore financial centre, oil shale / tar sands, open economy, openstreetmap, patent troll, payday loans, peer-to-peer lending, Phillips curve, plutocrats, Ponzi scheme, precariat, quantitative easing, remote working, rent control, rent-seeking, ride hailing / ride sharing, Right to Buy, Robert Gordon, Ronald Coase, Ronald Reagan, Sam Altman, savings glut, Second Machine Age, secular stagnation, sharing economy, Silicon Valley, Silicon Valley startup, Simon Kuznets, SoftBank, sovereign wealth fund, Stephen Hawking, Steve Ballmer, structural adjustment programs, TaskRabbit, The Chicago School, The Future of Employment, the payments system, The Rise and Fall of American Growth, Thomas Malthus, Thorstein Veblen, too big to fail, Tragedy of the Commons, Travis Kalanick, Uber and Lyft, Uber for X, uber lyft, Y Combinator, zero-sum game, Zipcar

This is what platform corporations want, and what neo-liberals have always wanted, because they depict all collective bodies as distorting the market and preventing market clearing.30 The platforms are reducing the rental income gained by those inside occupational communities and transferring that to themselves, further reducing the returns to labour and work. One of the least analysed aspects of the neo-liberal agenda has been the re-regulation of occupations, including all the great professions. Milton Friedman, an architect of the Chicago school of economics, wrote his first book (with Simon Kuznets) in 1945 on the medical professions, criticising their rent seeking through restricting the supply of doctors, imposing high standards, controlling fees and so on. When the neo-liberals achieved domination of the economics profession and economic policymaking in the 1980s, they launched an onslaught on occupational self-regulation.


pages: 411 words: 95,852

Britain Etc by Mark Easton

agricultural Revolution, Albert Einstein, Boris Johnson, British Empire, credit crunch, digital divide, digital rights, drug harm reduction, financial independence, garden city movement, global village, Howard Rheingold, income inequality, intangible asset, James Watt: steam engine, John Perry Barlow, knowledge economy, knowledge worker, low skilled workers, mass immigration, moral panic, Neil Armstrong, Ronald Reagan, science of happiness, sexual politics, Silicon Valley, Simon Kuznets, Slavoj Žižek, social software, traumatic brain injury

Economists, not social scientists, were invited to sit closest to the seat of power. Tangible wealth, rather than ethereal well-being, became the fundamental political goal. Even finding a single accepted measure of affluence proved tricky, and it wasn’t until the 1930s that Russian-born economist Simon Kuznets came up with the concept of Gross Domestic Product (GDP). For industrialised countries such as Britain, trying to recover from the deprivations of the Second World War in the 1940s and 50s, GDP was embraced as the best way to monitor material and social development. Despite Kuznets’ own warning that his measure should not be used as a surrogate for well-being, those three letters became the focus of UK government activity, recited mantra-like as an incantation for a better life.


pages: 378 words: 102,966

Affluenza: The All-Consuming Epidemic by John de Graaf, David Wann, Thomas H Naylor, David Horsey

Abraham Maslow, big-box store, carbon tax, classic study, Community Supported Agriculture, Corrections Corporation of America, Dennis Tito, disinformation, Donald Trump, Exxon Valdez, financial independence, Ford Model T, Ford paid five dollars a day, full employment, God and Mammon, greed is good, income inequality, informal economy, intentional community, invisible hand, Isaac Newton, It's morning again in America, junk bonds, low interest rates, Mark Shuttleworth, McMansion, medical malpractice, new economy, PalmPilot, Paradox of Choice, Peter Calthorpe, planned obsolescence, Ralph Nader, Ray Oldenburg, Ronald Reagan, Silicon Valley, Simon Kuznets, single-payer health, space junk, SpaceShipOne, systems thinking, The Great Good Place, trade route, upwardly mobile, Yogi Berra, young professional

As long as the GDP goes higher, everything’s cool. Politicians point to a swelling GDP as proof that their economic policies are working, and investors reassure themselves that with the overall expansion of the economy, their stocks will also expand. Yet even the chief architect of the GDP (then GNP), Simon Kuznets, believed that “the welfare of a nation can scarcely be inferred from a measurement like GNP.”5 Here’s why: although the overall numbers continue to rise, many key variables have grown worse. As we have already mentioned, the gap between the rich and everyone else is expanding. In addition, the nation is borrowing more and more from abroad, a symptom of anemic savings and mountains of household debt.


The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities by Mancur Olson

barriers to entry, British Empire, business cycle, California gold rush, collective bargaining, correlation coefficient, David Ricardo: comparative advantage, full employment, income per capita, Kenneth Arrow, market clearing, Norman Macrae, Pareto efficiency, Phillips curve, price discrimination, profit maximization, rent-seeking, Robert Solow, Sam Peltzman, search costs, selection bias, Simon Kuznets, The Wealth of Nations by Adam Smith, trade liberalization, transaction costs, urban decay, working poor

If all goes well (it rarely does), I shall devote my presidential address to the Southern Economic Association to this question; it will be published in the Southern Economic Journal in early 1983. 39. 1 am thankful to Ed Kearl for help on this point. 40. 1 am grateful to Moses Abramovitz, Geoffrey Brennan, and Simon Kuznets for giving me a fuller appreciation of the salience of this distinction. 41. "Thoughts on Catch-Up," October 1978, manuscript distributed to the conference on "The Political Economy of Comparative Growth Rates." University of Maryland, December 1978. 42. See Moses Abramovitz, "Notes on International Differences in Productivity Rates" in Mueller, The Political Economy of Growth. 43.


Forward: Notes on the Future of Our Democracy by Andrew Yang

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Affordable Care Act / Obamacare, Amazon Web Services, American Society of Civil Engineers: Report Card, basic income, benefit corporation, Bernie Sanders, blockchain, blue-collar work, call centre, centre right, clean water, contact tracing, coronavirus, correlation does not imply causation, COVID-19, data is the new oil, data science, deepfake, disinformation, Donald Trump, facts on the ground, fake news, forensic accounting, future of work, George Floyd, gig economy, global pandemic, income inequality, independent contractor, Jaron Lanier, Jeff Bezos, job automation, Kevin Roose, labor-force participation, Marc Benioff, Mark Zuckerberg, medical bankruptcy, new economy, obamacare, opioid epidemic / opioid crisis, pez dispenser, QAnon, recommendation engine, risk tolerance, rolodex, Ronald Reagan, Rutger Bregman, Sam Altman, Saturday Night Live, shareholder value, Shoshana Zuboff, Silicon Valley, Simon Kuznets, single-payer health, Snapchat, social distancing, SoftBank, surveillance capitalism, systematic bias, tech billionaire, TED Talk, The Day the Music Died, the long tail, TikTok, universal basic income, winner-take-all economy, working poor

I’ve run several organizations, and one of the lessons I learned is “you make what you measure.” If you don’t measure the right things, you won’t solve the right problems. Right now, we’re measuring the wrong things. We trumpet gross domestic product as the barometer of economic progress. Even the inventor of GDP, Simon Kuznets, said at its invention in 1934 that it was a terrible measure of national well-being and cautioned against using it as such, and here we are riding it into the ground eighty-seven years later. Bobby Kennedy famously echoed this idea, saying that GDP “does not allow for the health of our children, the quality of their education, or the joy of their play…[I]t measures everything, in short, except that which makes life worthwhile.”


pages: 355 words: 63

The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics by William R. Easterly

Andrei Shleifer, business climate, business cycle, Carmen Reinhart, central bank independence, clean water, colonial rule, correlation does not imply causation, creative destruction, endogenous growth, financial repression, foreign exchange controls, Gini coefficient, government statistician, Gunnar Myrdal, income inequality, income per capita, inflation targeting, interchangeable parts, inventory management, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, large denomination, low interest rates, manufacturing employment, Money creation, Network effects, New Urbanism, open economy, PalmPilot, Productivity paradox, purchasing power parity, rent-seeking, Robert Solow, Ronald Reagan, selection bias, Silicon Valley, Simon Kuznets, The Wealth of Nations by Adam Smith, Thomas Malthus, total factor productivity, trade liberalization, Tragedy of the Commons, urban sprawl, Watson beat the top human players on Jeopardy!, Yogi Berra, Yom Kippur War

The better state of social security in the United States, compared to other rich countries, is that our population is growing faster (thanks to immigration, not to fertility, as it turns out). A more ethereal reason that there could be positive effects of higher population is the genius principle. The more babies there are, the greater is the likelihood that one of them will grow up to be Mozart, Einstein, or Bill Gates. This effect, first pointed out by Simon Kuznets and Julian Simon,raises the stock of ideas that can then be used by any size population to better itself. Since ideas can be shared with additionalpersons at zero cost-an unlimited number of people can listen to a Mozart aria-new ideas are used moreeffectively in large than in small populations.


pages: 332 words: 106,197

The Divide: A Brief Guide to Global Inequality and Its Solutions by Jason Hickel

"World Economic Forum" Davos, Alan Greenspan, Andrei Shleifer, Asian financial crisis, Atahualpa, Bartolomé de las Casas, Bernie Sanders, Bob Geldof, Bretton Woods, British Empire, Cape to Cairo, capital controls, carbon credits, carbon footprint, carbon tax, clean water, collective bargaining, colonial rule, Cornelius Vanderbilt, David Attenborough, David Graeber, David Ricardo: comparative advantage, declining real wages, degrowth, dematerialisation, Doha Development Round, Elon Musk, European colonialism, falling living standards, financial deregulation, flying shuttle, Fractional reserve banking, Francisco Pizarro, full employment, Glass-Steagall Act, Global Witness, Hans Rosling, happiness index / gross national happiness, Howard Zinn, income inequality, Intergovernmental Panel on Climate Change (IPCC), investor state dispute settlement, James Watt: steam engine, laissez-faire capitalism, land reform, land value tax, liberal capitalism, Live Aid, Mahatma Gandhi, Money creation, Monroe Doctrine, Mont Pelerin Society, moral hazard, Naomi Klein, negative emissions, Nelson Mandela, offshore financial centre, oil shale / tar sands, out of africa, Phillips curve, planned obsolescence, plutocrats, purchasing power parity, race to the bottom, rent control, road to serfdom, Ronald Reagan, Scramble for Africa, shareholder value, sharing economy, Silicon Valley, Simon Kuznets, structural adjustment programs, TED Talk, The Chicago School, The Spirit Level, trade route, transatlantic slave trade, transfer pricing, trickle-down economics, Washington Consensus, WikiLeaks, women in the workforce, Works Progress Administration

Of all the economic ideas out there today, this is perhaps the most hegemonic. It is so commonly accepted that almost nobody thinks to question it. We tend to take the GDP measure for granted as though it has always existed. Most people don’t realise that it was invented only recently. It has a history. During the 1930s, the economists Simon Kuznets and John Maynard Keynes set out to design an economic aggregate that would help policymakers figure out how to escape the Great Depression. The goal was to calculate the total monetary value of all the goods and services produced in the economy so they could see more clearly what was going wrong and what needed to be done to fix it.


pages: 374 words: 111,284

The AI Economy: Work, Wealth and Welfare in the Robot Age by Roger Bootle

"World Economic Forum" Davos, 3D printing, agricultural Revolution, AI winter, Albert Einstein, AlphaGo, Alvin Toffler, anti-work, antiwork, autonomous vehicles, basic income, Ben Bernanke: helicopter money, Bernie Sanders, Bletchley Park, blockchain, call centre, Cambridge Analytica, Capital in the Twenty-First Century by Thomas Piketty, Carl Icahn, Chris Urmson, computer age, Computing Machinery and Intelligence, conceptual framework, corporate governance, correlation does not imply causation, creative destruction, David Ricardo: comparative advantage, deep learning, DeepMind, deindustrialization, Demis Hassabis, deskilling, Dr. Strangelove, driverless car, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, everywhere but in the productivity statistics, facts on the ground, fake news, financial intermediation, full employment, future of work, Future Shock, general purpose technology, Great Leap Forward, Hans Moravec, income inequality, income per capita, industrial robot, Internet of things, invention of the wheel, Isaac Newton, James Watt: steam engine, Jeff Bezos, Jeremy Corbyn, job automation, job satisfaction, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John von Neumann, Joseph Schumpeter, Kevin Kelly, license plate recognition, low interest rates, machine translation, Marc Andreessen, Mark Zuckerberg, market bubble, mega-rich, natural language processing, Network effects, new economy, Nicholas Carr, Ocado, Paul Samuelson, Peter Thiel, Phillips curve, positional goods, quantitative easing, RAND corporation, Ray Kurzweil, Richard Florida, ride hailing / ride sharing, rising living standards, road to serfdom, Robert Gordon, Robert Shiller, Robert Solow, Rutger Bregman, Second Machine Age, secular stagnation, self-driving car, seminal paper, Silicon Valley, Silicon Valley billionaire, Simon Kuznets, Skype, social intelligence, spinning jenny, Stanislav Petrov, Stephen Hawking, Steven Pinker, synthetic biology, technological singularity, The Future of Employment, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, universal basic income, US Airways Flight 1549, Vernor Vinge, warehouse automation, warehouse robotics, Watson beat the top human players on Jeopardy!, We wanted flying cars, instead we got 140 characters, wealth creators, winner-take-all economy, world market for maybe five computers, Y2K, Yogi Berra

But it is likely that the balance of the factors listed above will enable the mass of people to enjoy increasing incomes even as robots and AI start to proliferate. And it is perfectly plausible that there will not be a significant increase in income inequality. If there is, it may well be a temporary phenomenon. The great economist Simon Kuznets argued that economic development would at first increase inequality but that subsequently this widening would be reversed. Moreover, this story fits in with the history of the Industrial Revolution. As I showed in Chapter 1, in the first few decades of the nineteenth century the real incomes of workers fell.


pages: 387 words: 120,155

Inside the Nudge Unit: How Small Changes Can Make a Big Difference by David Halpern

Affordable Care Act / Obamacare, availability heuristic, behavioural economics, carbon footprint, Cass Sunstein, centre right, choice architecture, cognitive dissonance, cognitive load, collaborative consumption, correlation does not imply causation, Daniel Kahneman / Amos Tversky, data science, different worldview, endowment effect, gamification, happiness index / gross national happiness, hedonic treadmill, hindsight bias, IKEA effect, illegal immigration, job satisfaction, Kickstarter, language acquisition, libertarian paternalism, light touch regulation, longitudinal study, machine readable, market design, meta-analysis, Milgram experiment, nudge unit, peer-to-peer lending, pension reform, precautionary principle, presumed consent, QR code, quantitative easing, randomized controlled trial, Richard Thaler, Right to Buy, Ronald Reagan, Rory Sutherland, Simon Kuznets, skunkworks, supply chain finance, the built environment, theory of mind, traffic fines, twin studies, World Values Survey

The first class of problems have kept philosophers happy, if no one else, for a good 200 years. But without an answer to the second question – measurement – the whole debate had to be left to philosophers in their armchairs. Measuring well-being: from GDP to SWB (subjective well-being) In 1937, Simon Kuznets presented the report National Income, 1929– 35 to the US Congress, which contained the initial idea of a single measure of economic progress. This measure became known as Gross Domestic Product (GDP), and was designed to capture the economic activity of an entire country. Since the Second World War, GDP has been used to measure and compare countries’ economic growth, but has also been used as a proxy for how well off the country’s citizens are.


pages: 437 words: 115,594

The Great Surge: The Ascent of the Developing World by Steven Radelet

Admiral Zheng, agricultural Revolution, Asian financial crisis, bank run, Berlin Wall, biodiversity loss, Boeing 747, Branko Milanovic, business climate, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, clean water, colonial rule, creative destruction, demographic dividend, Deng Xiaoping, Dissolution of the Soviet Union, Doha Development Round, Erik Brynjolfsson, European colonialism, export processing zone, F. W. de Klerk, failed state, Francis Fukuyama: the end of history, Gini coefficient, global pandemic, global supply chain, Great Leap Forward, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), invention of the steam engine, James Watt: steam engine, John Snow's cholera map, Joseph Schumpeter, Kenneth Arrow, land reform, low interest rates, low skilled workers, M-Pesa, megacity, middle-income trap, Mikhail Gorbachev, Nelson Mandela, off grid, oil shock, out of africa, purchasing power parity, race to the bottom, randomized controlled trial, Robert Gordon, Robert Solow, Second Machine Age, secular stagnation, Shenzhen special economic zone , Sheryl Sandberg, Simon Kuznets, South China Sea, special economic zone, standardized shipping container, Steven Pinker, The Wealth of Nations by Adam Smith, Thomas Malthus, three-masted sailing ship, trade route, women in the workforce, working poor

Economist Branko Milanovic explores these and other ideas about inequality in developing countries in his terrific book The Haves and the Have-Nots: A Brief and Idiosyncratic History of Global Inequality.21 Inequality Within Countries Most people have a strong presumption that inequality within countries worsens as economic growth proceeds, and—possibly—gets better at higher income levels. Much of the early research on development, especially the work of Simon Kuznets and Sir Arthur Lewis in the 1950s, suggested that would be the case. Stylistically, everyone starts out poor but equal; then some people begin to earn higher incomes, creating a widening income gap; and then over time others catch up and partially close the gap. But extensive research shows that, over the past several decades, this pattern has not held.


pages: 414 words: 119,116

The Health Gap: The Challenge of an Unequal World by Michael Marmot

active measures, active transport: walking or cycling, Affordable Care Act / Obamacare, Atul Gawande, Bonfire of the Vanities, Broken windows theory, cakes and ale, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Celtic Tiger, centre right, clean water, cognitive load, congestion charging, correlation does not imply causation, Doha Development Round, epigenetics, financial independence, future of work, Gini coefficient, Growth in a Time of Debt, illegal immigration, income inequality, Indoor air pollution, Kenneth Rogoff, Kibera, labour market flexibility, longitudinal study, lump of labour, Mahatma Gandhi, Mahbub ul Haq, meta-analysis, microcredit, move 37, New Urbanism, obamacare, paradox of thrift, race to the bottom, Rana Plaza, RAND corporation, road to serfdom, Simon Kuznets, Socratic dialogue, structural adjustment programs, the built environment, The Spirit Level, trickle-down economics, twin studies, urban planning, Washington Consensus, Winter of Discontent, working poor

The bulk of the chapter will then deal with health inequalities. Piketty’s central point is that the return on capital is higher than the growth of income. Therefore capital accumulates. Prior to Piketty’s painstaking collection and analysis of data, economists were not so concerned with distribution. Simon Kuznets, a distinguished US economist, observed that in the US and some other countries, as their economies developed and grew, up t0 the mid-twentieth century, inequality diminished. Inequality was just a stage of development, no need to worry about it, no politics involved. Piketty, drawing on detailed study of the data over a longer period of time, points out that the period Kuznets was observing, roughly 1914–70, was an aberration.


pages: 443 words: 112,800

The Third Industrial Revolution: How Lateral Power Is Transforming Energy, the Economy, and the World by Jeremy Rifkin

3D printing, additive manufacturing, Albert Einstein, American ideology, An Inconvenient Truth, barriers to entry, behavioural economics, bike sharing, borderless world, carbon footprint, centre right, clean tech, collaborative consumption, collaborative economy, Community Supported Agriculture, corporate governance, decarbonisation, deep learning, distributed generation, electricity market, en.wikipedia.org, energy security, energy transition, Ford Model T, global supply chain, Great Leap Forward, high-speed rail, hydrogen economy, income inequality, industrial cluster, informal economy, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Isaac Newton, job automation, knowledge economy, manufacturing employment, marginal employment, Martin Wolf, Masdar, megacity, Mikhail Gorbachev, new economy, off grid, off-the-grid, oil shale / tar sands, oil shock, open borders, peak oil, Ponzi scheme, post-oil, purchasing power parity, Ray Kurzweil, rewilding, Robert Solow, Ronald Reagan, scientific management, scientific worldview, Silicon Valley, Simon Kuznets, Skype, smart grid, smart meter, Spread Networks laid a new fibre optics cable between New York and Chicago, supply-chain management, systems thinking, tech billionaire, the market place, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, transaction costs, trickle-down economics, urban planning, urban renewal, Yom Kippur War, Zipcar

The gross domestic product (GDP) was created in the 1930s to measure the value of the sum total of economic goods and services generated over a single year. The problem with the index is that it counts negative as well as positive economic activity. If a country invests large sums of money in armaments, builds prisons, expands police security, and has to clean up polluted environments and the like, it’s included in the GDP. Simon Kuznets, an American who invented the GDP measurement tool, pointed out early on that “[t]he welfare of a nation can . . . scarcely be inferred from a measurement of national income.”28 Later in life, Kuznets became even more emphatic about the drawbacks of relying on the GDP as a gauge of economic prosperity.


pages: 376 words: 118,542

Free to Choose: A Personal Statement by Milton Friedman, Rose D. Friedman

affirmative action, agricultural Revolution, air freight, back-to-the-land, bank run, banking crisis, business cycle, Corn Laws, foreign exchange controls, Fractional reserve banking, full employment, German hyperinflation, invisible hand, means of production, minimum wage unemployment, oil shale / tar sands, oil shock, price stability, Ralph Nader, RAND corporation, rent control, road to serfdom, Sam Peltzman, school vouchers, Simon Kuznets, The Wealth of Nations by Adam Smith, union organizing, Unsafe at Any Speed, Upton Sinclair, urban renewal, War on Poverty, working poor, Works Progress Administration

See Yale Brozen and Milton Friedman, The Minimum Wage Rate (Washington, D.C.: The Free Society Association, April 1966); Finis Welch, Minimum Wages: Issues and Evidence (Washington, D.C.: American Enterprise Institute, 1978); and Economic Report of the President, January 1979, p. 218. 8. See Milton Friedman and Simon Kuznets, Income from Independent Professional Practice (New York: National Bureau of Economic Research, 1945), pp. 8–21. 9. Michael Pertschuk, "Needs and Incomes," Regulation, March/April 1979. 10. William Taylor, Executive Vice-President of the Valley Camp Coal Company, as quoted in Melvyn Dubofsky and Warren Van Tine, John L.


pages: 453 words: 117,893

What Would the Great Economists Do?: How Twelve Brilliant Minds Would Solve Today's Biggest Problems by Linda Yueh

3D printing, additive manufacturing, Asian financial crisis, augmented reality, bank run, banking crisis, basic income, Bear Stearns, Ben Bernanke: helicopter money, Berlin Wall, Bernie Sanders, Big bang: deregulation of the City of London, bike sharing, bitcoin, Branko Milanovic, Bretton Woods, BRICs, business cycle, Capital in the Twenty-First Century by Thomas Piketty, clean water, collective bargaining, computer age, Corn Laws, creative destruction, credit crunch, Credit Default Swap, cryptocurrency, currency peg, dark matter, David Ricardo: comparative advantage, debt deflation, declining real wages, deindustrialization, Deng Xiaoping, Doha Development Round, Donald Trump, endogenous growth, everywhere but in the productivity statistics, export processing zone, Fall of the Berlin Wall, fear of failure, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, fixed income, forward guidance, full employment, general purpose technology, Gini coefficient, Glass-Steagall Act, global supply chain, Great Leap Forward, Gunnar Myrdal, Hyman Minsky, income inequality, index card, indoor plumbing, industrial robot, information asymmetry, intangible asset, invisible hand, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, laissez-faire capitalism, land reform, lateral thinking, life extension, low interest rates, low-wage service sector, manufacturing employment, market bubble, means of production, middle-income trap, mittelstand, Money creation, Mont Pelerin Society, moral hazard, mortgage debt, negative equity, Nelson Mandela, non-tariff barriers, Northern Rock, Occupy movement, oil shale / tar sands, open economy, paradox of thrift, Paul Samuelson, price mechanism, price stability, Productivity paradox, purchasing power parity, quantitative easing, RAND corporation, rent control, rent-seeking, reserve currency, reshoring, road to serfdom, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, school vouchers, secular stagnation, Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, special economic zone, Steve Jobs, technological determinism, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, total factor productivity, trade liberalization, universal basic income, unorthodox policies, Washington Consensus, We are the 99%, women in the workforce, working-age population

Friedman considered this his most technical piece of research, for which he was to later win the Nobel Prize, along with his work on monetary economics and business cycles.5 After two years in Washington, Friedman moved back to New York to work at the National Bureau of Economic Research (NBER). One of his professors from Columbia, Wesley Mitchell, was director. He also taught part-time at Columbia and worked as a research assistant for Simon Kuznets, who was to go on and win the 1971 Nobel Prize in economics. He had encouraged Friedman to work with empirical data, which at the time was a field in its formative stage, and became an important part of Friedman’s approach to economics. In September 1939 war broke out in Europe, but with little immediate effect on either Friedman or America generally, which was not to enter the war for another two years.


pages: 374 words: 113,126

The Great Economists: How Their Ideas Can Help Us Today by Linda Yueh

3D printing, additive manufacturing, Asian financial crisis, augmented reality, bank run, banking crisis, basic income, Bear Stearns, Ben Bernanke: helicopter money, Berlin Wall, Bernie Sanders, Big bang: deregulation of the City of London, bike sharing, bitcoin, Branko Milanovic, Bretton Woods, BRICs, business cycle, Capital in the Twenty-First Century by Thomas Piketty, clean water, collective bargaining, computer age, Corn Laws, creative destruction, credit crunch, Credit Default Swap, cryptocurrency, currency peg, dark matter, David Ricardo: comparative advantage, debt deflation, declining real wages, deindustrialization, Deng Xiaoping, Doha Development Round, Donald Trump, endogenous growth, everywhere but in the productivity statistics, export processing zone, Fall of the Berlin Wall, fear of failure, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, fixed income, forward guidance, full employment, general purpose technology, Gini coefficient, Glass-Steagall Act, global supply chain, Great Leap Forward, Gunnar Myrdal, Hyman Minsky, income inequality, index card, indoor plumbing, industrial robot, information asymmetry, intangible asset, invisible hand, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, laissez-faire capitalism, land reform, lateral thinking, life extension, low interest rates, manufacturing employment, market bubble, means of production, middle-income trap, mittelstand, Money creation, Mont Pelerin Society, moral hazard, mortgage debt, negative equity, Nelson Mandela, non-tariff barriers, Northern Rock, Occupy movement, oil shale / tar sands, open economy, paradox of thrift, Paul Samuelson, price mechanism, price stability, Productivity paradox, purchasing power parity, quantitative easing, RAND corporation, rent control, rent-seeking, reserve currency, reshoring, road to serfdom, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, school vouchers, secular stagnation, Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, special economic zone, Steve Jobs, technological determinism, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, total factor productivity, trade liberalization, universal basic income, unorthodox policies, Washington Consensus, We are the 99%, women in the workforce, working-age population

Friedman considered this his most technical piece of research, for which he was to later win the Nobel Prize, along with his work on monetary economics and business cycles.5 After two years in Washington, Friedman moved back to New York to work at the National Bureau of Economic Research (NBER). One of his professors from Columbia, Wesley Mitchell, was director. He also taught part-time at Columbia and worked as a research assistant for Simon Kuznets, who was to go on and win the 1971 Nobel Prize in economics. He had encouraged Friedman to work with empirical data, which at the time was a field in its formative stage, and became an important part of Friedman’s approach to economics. In September 1939 war broke out in Europe, but with little immediate effect on either Friedman or America generally, which was not to enter the war for another two years.


pages: 573 words: 115,489

Prosperity Without Growth: Foundations for the Economy of Tomorrow by Tim Jackson

"World Economic Forum" Davos, Alan Greenspan, bank run, banking crisis, banks create money, Basel III, basic income, biodiversity loss, bonus culture, Boris Johnson, business cycle, carbon footprint, Carmen Reinhart, Cass Sunstein, choice architecture, circular economy, collapse of Lehman Brothers, creative destruction, credit crunch, Credit Default Swap, critique of consumerism, David Graeber, decarbonisation, degrowth, dematerialisation, en.wikipedia.org, energy security, financial deregulation, Financial Instability Hypothesis, financial intermediation, full employment, Garrett Hardin, Glass-Steagall Act, green new deal, Growth in a Time of Debt, Hans Rosling, Hyman Minsky, impact investing, income inequality, income per capita, intentional community, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invisible hand, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, laissez-faire capitalism, liberal capitalism, low interest rates, Mahatma Gandhi, mass immigration, means of production, meta-analysis, Money creation, moral hazard, mortgage debt, Murray Bookchin, Naomi Klein, negative emissions, new economy, ocean acidification, offshore financial centre, oil shale / tar sands, open economy, paradox of thrift, peak oil, peer-to-peer lending, Philip Mirowski, Post-Keynesian economics, profit motive, purchasing power parity, quantitative easing, retail therapy, Richard Thaler, road to serfdom, Robert Gordon, Robert Solow, Ronald Reagan, science of happiness, secular stagnation, short selling, Simon Kuznets, Skype, smart grid, sovereign wealth fund, Steve Jobs, TED Talk, The Chicago School, The Great Moderation, The Rise and Fall of American Growth, The Spirit Level, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, Tragedy of the Commons, universal basic income, Works Progress Administration, World Values Survey, zero-sum game

On the footprint of metals, see Wiedmann et al. (2015). 21 See, for example, ‘Digging for victory’, The Economist, 15 November 2008, p. 69. 22 Krugman (2014), NCE (2014), Stern (2007) and UNEP (2011) are amongst the many proponents of this kind of argument. 23 This relationship is sometimes called the Environmental Kuznets Curve after the economist Simon Kuznets, who proposed that a similar inverted U-shaped relationship exists between incomes and income inequality. Evidence of the income Kuznets curve is also difficult to find (OECD 2008). For more discussion of the Environmental Kuznets Curve hypothesis, see, for example, Grossman and Krueger (1995), Jackson (1996), Rothman (1998). 24 Booth (2004: 73 et seq.).


pages: 426 words: 118,913

Green Philosophy: How to Think Seriously About the Planet by Roger Scruton

An Inconvenient Truth, barriers to entry, carbon credits, carbon footprint, carbon tax, Cass Sunstein, Climategate, Climatic Research Unit, corporate social responsibility, demand response, Easter island, edge city, endowment effect, energy security, Exxon Valdez, failed state, food miles, garden city movement, Garrett Hardin, ghettoisation, happiness index / gross national happiness, Herbert Marcuse, hobby farmer, Howard Zinn, income inequality, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jane Jacobs, joint-stock company, joint-stock limited liability company, Kenneth Arrow, knowledge economy, Lewis Mumford, market friction, Martin Wolf, moral hazard, Naomi Klein, New Urbanism, Peter Singer: altruism, phenotype, precautionary principle, rent-seeking, Robert Solow, Ronald Coase, Sam Peltzman, Silicon Valley, Simon Kuznets, tacit knowledge, the built environment, The Death and Life of Great American Cities, the market place, Thomas Malthus, Tragedy of the Commons, transaction costs, University of East Anglia, urban planning, urban sprawl, Vilfredo Pareto, women in the workforce, zero-sum game

Hence the first concern of democratic governments is to encourage economic growth, regardless of its environmental costs. It is true that serious poverty is a major cause of environmental degradation and that a certain level of prosperity is necessary if people are to free the energy and resources required to protect their environment.11 Studies have suggested that the curve postulated by Simon Kuznets, which shows income inequality at first rising and then falling as societies develop, is exhibited also by key environmental factors. Above an average annual per capita income of $4,000 to $5,000, it has been suggested, environmental degradation steadily declines.12 Nevertheless, whether expressed as a prediction or as a recommendation, the statement that there are ‘limits to growth’ has an air of intuitive plausibility.


Human Frontiers: The Future of Big Ideas in an Age of Small Thinking by Michael Bhaskar

"Margaret Hamilton" Apollo, 3D printing, additive manufacturing, AI winter, Albert Einstein, algorithmic trading, AlphaGo, Anthropocene, artificial general intelligence, augmented reality, autonomous vehicles, backpropagation, barriers to entry, basic income, behavioural economics, Benoit Mandelbrot, Berlin Wall, Big bang: deregulation of the City of London, Big Tech, Bletchley Park, blockchain, Boeing 747, brain emulation, Brexit referendum, call centre, carbon tax, charter city, citizen journalism, Claude Shannon: information theory, Clayton Christensen, clean tech, clean water, cognitive load, Columbian Exchange, coronavirus, cosmic microwave background, COVID-19, creative destruction, CRISPR, crony capitalism, cyber-physical system, dark matter, David Graeber, deep learning, DeepMind, deindustrialization, dematerialisation, Demis Hassabis, demographic dividend, Deng Xiaoping, deplatforming, discovery of penicillin, disruptive innovation, Donald Trump, double entry bookkeeping, Easter island, Edward Jenner, Edward Lorenz: Chaos theory, Elon Musk, en.wikipedia.org, endogenous growth, energy security, energy transition, epigenetics, Eratosthenes, Ernest Rutherford, Eroom's law, fail fast, false flag, Fellow of the Royal Society, flying shuttle, Ford Model T, Francis Fukuyama: the end of history, general purpose technology, germ theory of disease, glass ceiling, global pandemic, Goodhart's law, Google Glasses, Google X / Alphabet X, GPT-3, Haber-Bosch Process, hedonic treadmill, Herman Kahn, Higgs boson, hive mind, hype cycle, Hyperloop, Ignaz Semmelweis: hand washing, Innovator's Dilemma, intangible asset, interchangeable parts, Internet of things, invention of agriculture, invention of the printing press, invention of the steam engine, invention of the telegraph, invisible hand, Isaac Newton, ITER tokamak, James Watt: steam engine, James Webb Space Telescope, Jeff Bezos, jimmy wales, job automation, Johannes Kepler, John von Neumann, Joseph Schumpeter, Kenneth Arrow, Kevin Kelly, Kickstarter, knowledge economy, knowledge worker, Large Hadron Collider, liberation theology, lockdown, lone genius, loss aversion, Louis Pasteur, Mark Zuckerberg, Martin Wolf, megacity, megastructure, Menlo Park, Minecraft, minimum viable product, mittelstand, Modern Monetary Theory, Mont Pelerin Society, Murray Gell-Mann, Mustafa Suleyman, natural language processing, Neal Stephenson, nuclear winter, nudge unit, oil shale / tar sands, open economy, OpenAI, opioid epidemic / opioid crisis, PageRank, patent troll, Peter Thiel, plutocrats, post scarcity, post-truth, precautionary principle, public intellectual, publish or perish, purchasing power parity, quantum entanglement, Ray Kurzweil, remote working, rent-seeking, Republic of Letters, Richard Feynman, Robert Gordon, Robert Solow, secular stagnation, shareholder value, Silicon Valley, Silicon Valley ideology, Simon Kuznets, skunkworks, Slavoj Žižek, sovereign wealth fund, spinning jenny, statistical model, stem cell, Steve Jobs, Stuart Kauffman, synthetic biology, techlash, TED Talk, The Rise and Fall of American Growth, the scientific method, The Wealth of Nations by Adam Smith, Thomas Bayes, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, TikTok, total factor productivity, transcontinental railway, Two Sigma, Tyler Cowen, Tyler Cowen: Great Stagnation, universal basic income, uranium enrichment, We wanted flying cars, instead we got 140 characters, When a measure becomes a target, X Prize, Y Combinator

They are cumulative, local, small scale and occupy the vast majority of what counts as invention, but nonetheless sometimes concatenations of the latter lead to the former. Many others have suggested similar structures to illustrate how markets, companies, products and technologies form and flourish. Some innovations have outsized impact – Simon Kuznets called them ‘epochal innovations’ and the economist Carlota Perez explicitly refers to them as ‘techno-economic paradigm shifts’.18 Epochal innovations are crises that initiate new paradigms. The writer and executive Safi Bahcall talks of ‘loonshot’ business, say a small drug company or indie film crew, versus ‘franchises’ like big pharma companies and Hollywood studios.19 Franchise projects are entrenched blockbusters: the last Harry Potter, not the first; the iPhone XII, not the iPhone.


pages: 478 words: 126,416

Other People's Money: Masters of the Universe or Servants of the People? by John Kay

Affordable Care Act / Obamacare, Alan Greenspan, asset-backed security, bank run, banking crisis, Basel III, Bear Stearns, behavioural economics, Bernie Madoff, Big bang: deregulation of the City of London, bitcoin, Black Monday: stock market crash in 1987, Black Swan, Bonfire of the Vanities, bonus culture, book value, Bretton Woods, buy and hold, call centre, capital asset pricing model, Capital in the Twenty-First Century by Thomas Piketty, cognitive dissonance, Cornelius Vanderbilt, corporate governance, Credit Default Swap, cross-subsidies, currency risk, dematerialisation, disinformation, disruptive innovation, diversification, diversified portfolio, Edward Lloyd's coffeehouse, Elon Musk, Eugene Fama: efficient market hypothesis, eurozone crisis, financial engineering, financial innovation, financial intermediation, financial thriller, fixed income, Flash crash, forward guidance, Fractional reserve banking, full employment, George Akerlof, German hyperinflation, Glass-Steagall Act, Goldman Sachs: Vampire Squid, Greenspan put, Growth in a Time of Debt, Ida Tarbell, income inequality, index fund, inflation targeting, information asymmetry, intangible asset, interest rate derivative, interest rate swap, invention of the wheel, Irish property bubble, Isaac Newton, it is difficult to get a man to understand something, when his salary depends on his not understanding it, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", Jim Simons, John Meriwether, junk bonds, light touch regulation, London Whale, Long Term Capital Management, loose coupling, low cost airline, M-Pesa, market design, Mary Meeker, megaproject, Michael Milken, millennium bug, mittelstand, Money creation, money market fund, moral hazard, mortgage debt, Myron Scholes, NetJets, new economy, Nick Leeson, Northern Rock, obamacare, Occupy movement, offshore financial centre, oil shock, passive investing, Paul Samuelson, Paul Volcker talking about ATMs, peer-to-peer lending, performance metric, Peter Thiel, Piper Alpha, Ponzi scheme, price mechanism, proprietary trading, purchasing power parity, quantitative easing, quantitative trading / quantitative finance, railway mania, Ralph Waldo Emerson, random walk, reality distortion field, regulatory arbitrage, Renaissance Technologies, rent control, risk free rate, risk tolerance, road to serfdom, Robert Shiller, Ronald Reagan, Schrödinger's Cat, seminal paper, shareholder value, Silicon Valley, Simon Kuznets, South Sea Bubble, sovereign wealth fund, Spread Networks laid a new fibre optics cable between New York and Chicago, Steve Jobs, Steve Wozniak, The Great Moderation, The Market for Lemons, the market place, The Myth of the Rational Market, the payments system, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Tobin tax, too big to fail, transaction costs, tulip mania, Upton Sinclair, Vanguard fund, vertical integration, Washington Consensus, We are the 99%, Yom Kippur War

A reasonable guess might be that between 100,000 and 150,000 people in Britain are finance professionals dealing in wholesale markets (what might generally be described as ‘the City’) and that two to three times that number support them. The principles of national income accounting were set out around the time of the Second World War by a group of economists – notably Simon Kuznets, James Meade and Richard Stone – and these principles are the standard means of measuring the economic contribution of a commercial activity. We assess the car industry by its added value: the difference between the selling price of the car and the cost of the steel, rubber and other materials that went into it.


pages: 494 words: 116,739

Geek Heresy: Rescuing Social Change From the Cult of Technology by Kentaro Toyama

Abraham Maslow, Albert Einstein, Apollo 11, behavioural economics, Berlin Wall, Bernie Madoff, blood diamond, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, cognitive dissonance, commoditize, computer vision, conceptual framework, delayed gratification, digital divide, do well by doing good, Edward Glaeser, Edward Jenner, en.wikipedia.org, end world poverty, epigenetics, Erik Brynjolfsson, Evgeny Morozov, Francis Fukuyama: the end of history, fundamental attribution error, gamification, germ theory of disease, global village, Hans Rosling, happiness index / gross national happiness, income inequality, invention of the printing press, invisible hand, Isaac Newton, Khan Academy, Kibera, knowledge worker, Larry Ellison, Lewis Mumford, liberation theology, libertarian paternalism, longitudinal study, M-Pesa, Mahatma Gandhi, Mark Zuckerberg, means of production, microcredit, mobile money, Neil Armstrong, Nelson Mandela, Nicholas Carr, North Sea oil, One Laptop per Child (OLPC), Panopticon Jeremy Bentham, pattern recognition, Peter Singer: altruism, Peter Thiel, post-industrial society, Powell Memorandum, randomized controlled trial, rent-seeking, RFID, Richard Florida, Richard Thaler, school vouchers, self-driving car, Sheryl Sandberg, Silicon Valley, Simon Kuznets, Stanford marshmallow experiment, Steve Jobs, Steven Pinker, technological determinism, technological solutionism, technoutopianism, TED Talk, The Fortune at the Bottom of the Pyramid, the long tail, Twitter Arab Spring, Upton Sinclair, Walter Mischel, War on Poverty, winner-take-all economy, World Values Survey, Y2K

Variations of this quotation are often attributed to Albert Einstein, but thanks to O’Toole (2010), I was able to trace its true source to sociologist William Bruce Cameron (1963), p. 13. 56.The United States grew to be a major economic power well before we were able to measure GDP. In the 1930s, the economist Simon Kuznets architected the first system of national income accounts. Since then, GDP has taken on a life of its own in exactly the ways that Kuznets cautioned against. A good account of his warnings and our failure to take them into account is offered by Rowe (2008). 57.Rankism – the root of all forms of discrimination and abuse of power – is nicely defined and demolished by Robert W.


pages: 424 words: 119,679

It's Better Than It Looks: Reasons for Optimism in an Age of Fear by Gregg Easterbrook

affirmative action, Affordable Care Act / Obamacare, air freight, Alan Greenspan, Apollo 11, autonomous vehicles, basic income, Bernie Madoff, Bernie Sanders, Black Lives Matter, Boeing 747, Branko Milanovic, Brexit referendum, business cycle, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, clean tech, clean water, coronavirus, Crossrail, David Brooks, David Ricardo: comparative advantage, deindustrialization, Dissolution of the Soviet Union, Donald Trump, driverless car, Elon Musk, Exxon Valdez, factory automation, failed state, fake news, full employment, Gini coefficient, Google Earth, Home mortgage interest deduction, hydraulic fracturing, Hyperloop, illegal immigration, impulse control, income inequality, independent contractor, Indoor air pollution, interchangeable parts, Intergovernmental Panel on Climate Change (IPCC), invisible hand, James Watt: steam engine, labor-force participation, liberal capitalism, longitudinal study, Lyft, mandatory minimum, manufacturing employment, Mikhail Gorbachev, minimum wage unemployment, Modern Monetary Theory, obamacare, oil shale / tar sands, Paul Samuelson, peak oil, plant based meat, plutocrats, Ponzi scheme, post scarcity, purchasing power parity, quantitative easing, reserve currency, rising living standards, Robert Gordon, Ronald Reagan, self-driving car, short selling, Silicon Valley, Simon Kuznets, Slavoj Žižek, South China Sea, Steve Wozniak, Steven Pinker, supervolcano, The Chicago School, The Rise and Fall of American Growth, the scientific method, There's no reason for any individual to have a computer in his home - Ken Olsen, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, transaction costs, Tyler Cowen, uber lyft, universal basic income, War on Poverty, Washington Consensus, We are all Keynesians now, WikiLeaks, working poor, Works Progress Administration

But US federal spending for the poor, the working poor, the lower middle class, the disabled, and the retired is more substantial than generally understood. That federal entitlement spending is backed by two sources—taxes on the affluent and borrowing from the young through the national debt. Both are income-transfer mechanisms. Yet income inequality still is high. The Belarus-born economist Simon Kuznets, who won the Nobel Prize in Economics in 1971, showed that industrial development first increases and then decreases inequality. This formula has held since 1971 in most nations: if Kuznets continues to be correct, inequality in China soon will moderate. But inequality currents of the past century in the United States and Europe have been more like rolling waves than Kuznets expected, even discounting for the world wars.


pages: 480 words: 119,407

Invisible Women by Caroline Criado Perez

"Hurricane Katrina" Superdome, Affordable Care Act / Obamacare, algorithmic bias, augmented reality, Bernie Sanders, Cambridge Analytica, collective bargaining, crowdsourcing, data science, Diane Coyle, Donald Trump, falling living standards, first-past-the-post, gender pay gap, gig economy, glass ceiling, Grace Hopper, Hacker Ethic, independent contractor, Indoor air pollution, informal economy, lifelogging, low skilled workers, mental accounting, meta-analysis, Nate Silver, new economy, obamacare, Oculus Rift, offshore financial centre, pattern recognition, phenotype, post-industrial society, randomized controlled trial, remote working, Sheryl Sandberg, Silicon Valley, Simon Kuznets, speech recognition, stem cell, Stephen Hawking, Steven Levy, tech bro, the built environment, urban planning, women in the workforce, work culture , zero-sum game

And the decision over which to include is somewhat arbitrary. Until the 1930s we didn’t really measure the economy with any seriousness. But that changed in the wake of the Great Depression. In order to address the economic meltdown, governments needed to know more precisely what was going on, and in 1934 a statistician called Simon Kuznets produced the United States’ first national accounts.1 This was the birth of GDP. Then the Second World War came along, and it was during this period, explains Coyle, that the frame we use now was established. It was designed to suit the needs of the war economy, she tells me. ‘The main aim was to understand how much output could be produced and what consumption needed to be sacrificed to make sure there was enough available to support the war effort.’


pages: 420 words: 124,202

The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention by William Rosen

Albert Einstein, All science is either physics or stamp collecting, barriers to entry, Charles Babbage, collective bargaining, computer age, Copley Medal, creative destruction, David Ricardo: comparative advantage, decarbonisation, delayed gratification, Fellow of the Royal Society, flying shuttle, Flynn Effect, fudge factor, full employment, Higgs boson, independent contractor, invisible hand, Isaac Newton, Islamic Golden Age, iterative process, James Hargreaves, James Watt: steam engine, John Harrison: Longitude, Joseph Schumpeter, Joseph-Marie Jacquard, knowledge economy, language acquisition, Lewis Mumford, moral hazard, Network effects, Panopticon Jeremy Bentham, Paul Samuelson, Peace of Westphalia, Peter Singer: altruism, QWERTY keyboard, Ralph Waldo Emerson, rent-seeking, Robert Solow, Ronald Coase, Simon Kuznets, spinning jenny, tacit knowledge, the scientific method, The Wealth of Nations by Adam Smith, Thomas Malthus, three-masted sailing ship, transaction costs, transcontinental railway, zero-sum game, éminence grise

.: Inventors Publishing, 1931). 7 “lack of capital” Ibid. 8 more than half will continue to invest their time Thomas Astebro, “Inventor Perseverance After Being Told to Quit: The Role of Cognitive Biases,” Journal of Behavioral Decision Making 20, January 2007. 9 “may be inventors” Scherer, “Invention and Innovation in the Watt-Boulton Steam Engine Venture,” citing Joseph Schumpeter’s Theory of Economic Development. 10 Another study, this one conducted in 1962 Donald W. MacKinnon, “Intellect and Motive in Scientific Inventors: Implications for Supply,” in Simon Kuznets, ed., The Rate and Direction of Inventive Activity: Economic and Social Factors (Princeton: Princeton University Press, 1962). 11 the eighteenth-century Swiss mathematician Daniel Bernoulli Peter L. Bernstein, Against the Gods: The Remarkable Story of Risk (New York: John Wiley & Sons, 1996). 12 “The more inventive an independent inventor is” MacKinnon, “Intellect and Motive in Scientific Inventors: Implications for Supply,” in Kuznets, ed., Rate and Direction of Inventive Activity. 13 “first scientific man to study the Newcomen engine” “Henry Beighton” in Oxford Dictionary of National Biography. 14 Leonhard Euler applied Usher, History of Mechanical Inventions. 15 His published table of results Jennifer Karns Alexander, The Mantra of Efficiency: From Waterwheel to Social Control (Baltimore: Johns Hopkins University Press, 2008). 16 The resulting experiment Pacey, Maze of Ingenuity. 17 His example showed a generation of other engineers Mokyr, “The Great Synergy,” quoting Cardwell, 1994. 18 “In comparing different experiments” Pacey, Maze of Ingenuity. 19 As far back as the 1960s Dean Keith Simonton, “Creativity as Blind Variation and Selective Retention: Is the Creative Process Darwinian?”


pages: 481 words: 120,693

Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else by Chrystia Freeland

"World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Alan Greenspan, Albert Einstein, algorithmic trading, assortative mating, banking crisis, barriers to entry, Basel III, battle of ideas, Bear Stearns, behavioural economics, Bernie Madoff, Big bang: deregulation of the City of London, Black Monday: stock market crash in 1987, Black Swan, Boris Johnson, Branko Milanovic, Bretton Woods, BRICs, Bullingdon Club, business climate, call centre, carried interest, Cass Sunstein, Clayton Christensen, collapse of Lehman Brothers, commoditize, conceptual framework, corporate governance, creative destruction, credit crunch, Credit Default Swap, crony capitalism, Deng Xiaoping, disruptive innovation, don't be evil, double helix, energy security, estate planning, experimental subject, financial deregulation, financial engineering, financial innovation, Flash crash, Ford Model T, Frank Gehry, Gini coefficient, Glass-Steagall Act, global village, Goldman Sachs: Vampire Squid, Gordon Gekko, Guggenheim Bilbao, haute couture, high net worth, income inequality, invention of the steam engine, job automation, John Markoff, joint-stock company, Joseph Schumpeter, knowledge economy, knowledge worker, liberation theology, light touch regulation, linear programming, London Whale, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, Max Levchin, Mikhail Gorbachev, Moneyball by Michael Lewis explains big data, NetJets, new economy, Occupy movement, open economy, Peter Thiel, place-making, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, postindustrial economy, Potemkin village, profit motive, public intellectual, purchasing power parity, race to the bottom, rent-seeking, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, self-driving car, seminal paper, Sheryl Sandberg, short selling, Silicon Valley, Silicon Valley billionaire, Silicon Valley startup, Simon Kuznets, sovereign wealth fund, starchitect, stem cell, Steve Jobs, TED Talk, the long tail, the new new thing, The Spirit Level, The Wealth of Nations by Adam Smith, Tony Hsieh, too big to fail, trade route, trickle-down economics, Tyler Cowen: Great Stagnation, wage slave, Washington Consensus, winner-take-all economy, zero-sum game

Finally, in fully industrialized or postindustrial societies, income inequality would again decrease as education became more widespread and the state played a bigger, more redistributive role. This view of the relationship between economic development and income inequality was first and most clearly articulated by Simon Kuznets, a Belarusian-born immigrant to the United States. Kuznets illustrated his theory with one of the most famous graphs in economics—the Kuznets curve, an upside-down U that traces the movement of society as its economy becomes more sophisticated and productive, from low inequality, to high inequality, and back down to low inequality.


pages: 412 words: 128,042

Extreme Economies: Survival, Failure, Future – Lessons From the World’s Limits by Richard Davies

Abraham Maslow, agricultural Revolution, air freight, Anton Chekhov, artificial general intelligence, autonomous vehicles, barriers to entry, big-box store, cashless society, clean water, complexity theory, deindustrialization, digital divide, eurozone crisis, failed state, financial innovation, Ford Model T, Garrett Hardin, gentleman farmer, Global Witness, government statistician, illegal immigration, income inequality, informal economy, it's over 9,000, James Hargreaves, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, joint-stock company, large denomination, Livingstone, I presume, Malacca Straits, mandatory minimum, manufacturing employment, means of production, megacity, meta-analysis, new economy, off grid, oil shale / tar sands, pension reform, profit motive, randomized controlled trial, rolling blackouts, school choice, school vouchers, Scramble for Africa, side project, Silicon Valley, Simon Kuznets, Skype, spinning jenny, subscription business, The Chicago School, the payments system, trade route, Tragedy of the Commons, Travis Kalanick, uranium enrichment, urban planning, wealth creators, white picket fence, working-age population, Y Combinator, young professional

Petty, Stone and GDP William Petty’s works are set out in his 1662 book on taxation and in his 1676 Political Arithmetick; his contribution to the development of systems of national accounts is traced in Kendrick (1970) and more recently in Davies (ed.) (2015). While other economists – notably Simon Kuznets in the US – helped develop modern GDP measures, Richard Stone was arguably the most important, winning the Nobel Prize for his work in 1984. His contribution is discussed in Johansen (1985) and much more detail on all the various contributors is set out in Studenski (1958), while an accessible modern history is Coyle (2014).


pages: 494 words: 132,975

Keynes Hayek: The Clash That Defined Modern Economics by Nicholas Wapshott

airport security, Alan Greenspan, banking crisis, Bear Stearns, Bretton Woods, British Empire, business cycle, collective bargaining, complexity theory, creative destruction, cuban missile crisis, Francis Fukuyama: the end of history, full employment, Gordon Gekko, greed is good, Gunnar Myrdal, if you build it, they will come, Isaac Newton, Joseph Schumpeter, Kickstarter, liquidationism / Banker’s doctrine / the Treasury view, means of production, military-industrial complex, Mont Pelerin Society, mortgage debt, New Journalism, Nixon triggered the end of the Bretton Woods system, Northern Rock, Paul Samuelson, Philip Mirowski, Phillips curve, price mechanism, public intellectual, pushing on a string, road to serfdom, Robert Bork, Robert Solow, Ronald Reagan, Simon Kuznets, The Chicago School, The Great Moderation, The Wealth of Nations by Adam Smith, Thomas Malthus, trickle-down economics, Tyler Cowen, War on Poverty, We are all Keynesians now, Yom Kippur War

Serious recruitment and careful placement of sympathetic allies in key Washington offices became an imperative.”42 Inspired by a common creed, the young Keynesians sought each other out in the corridors of power and began meeting at the National Planning Association, set up in 1934. Keynesian ideas also took root in America thanks to the work of econometricians and statisticians like Simon Kuznets, professor of economics and statistics at the University of Pennsylvania, and his followers at the National Bureau of Economic Research and the U.S. Department of Commerce, whose work logging the workings of the economy warranted Kuznets an honorable mention in The General Theory. Although Kuznets never became a Keynesian, his pioneering work on compiling statistics about national income and gross national product were called in evidence to fuel Keynes’s argument that bolstering aggregate demand would boost economic growth.


Year 501 by Noam Chomsky

air traffic controllers' union, anti-communist, Bartolomé de las Casas, Berlin Wall, Bolshevik threat, Bretton Woods, British Empire, business cycle, capital controls, Caribbean Basin Initiative, classic study, colonial rule, corporate governance, cuban missile crisis, declining real wages, Deng Xiaoping, deskilling, Dissolution of the Soviet Union, European colonialism, experimental subject, Fall of the Berlin Wall, Howard Zinn, invisible hand, land reform, land tenure, long peace, mass incarceration, means of production, Monroe Doctrine, Nixon triggered the end of the Bretton Woods system, non-tariff barriers, offshore financial centre, plutocrats, price stability, Ralph Nader, Ralph Waldo Emerson, RAND corporation, Robert Solow, Ronald Reagan, scientific management, Simon Kuznets, strikebreaker, structural adjustment programs, the scientific method, The Wealth of Nations by Adam Smith, trade liberalization, trickle-down economics, union organizing, War on Poverty, working poor

In his 1952 study of late development, Alexander Gerschenkron describes the “approximate sixfold increase in the volume of industrial output” as “the greatest and the longest [spurt of industrialization] in the history of the country’s industrial development,” though this “great industrial transformation engineered by the Soviet government” had “a remote, if any” relation to “Marxian ideology, or any socialist ideology for that matter”; and was, of course, carried out at extraordinary human cost. In his studies 10 years later of long-term trends in economic development, Simon Kuznets listed Russia among the countries with the highest rate of growth of per capita product, along with Japan and Sweden, with the US—having started from a far higher peak—in the middle range over a century, slightly above England.3 The ultranationalist threat was greatly enhanced after Russia’s leading role in defeating Hider left it in control of Eastern and parts of Central Europe, separating these regions too from the domains of Western control.


pages: 442 words: 130,526

The Billionaire Raj: A Journey Through India's New Gilded Age by James Crabtree

"World Economic Forum" Davos, accounting loophole / creative accounting, Asian financial crisis, behavioural economics, Big bang: deregulation of the City of London, Branko Milanovic, business climate, call centre, Capital in the Twenty-First Century by Thomas Piketty, centre right, colonial rule, commodity super cycle, Cornelius Vanderbilt, corporate raider, creative destruction, crony capitalism, Daniel Kahneman / Amos Tversky, Deng Xiaoping, Donald Trump, facts on the ground, failed state, fake news, Francis Fukuyama: the end of history, global supply chain, Gunnar Myrdal, income inequality, informal economy, Joseph Schumpeter, land bank, liberal capitalism, Mahatma Gandhi, McMansion, megacity, Meghnad Desai, middle-income trap, New Urbanism, offshore financial centre, open economy, Parag Khanna, Pearl River Delta, plutocrats, Ponzi scheme, post-truth, public intellectual, quantitative easing, rent-seeking, Rubik’s Cube, Shenzhen special economic zone , Silicon Valley, Simon Kuznets, smart cities, special economic zone, spectrum auction, tech billionaire, The Great Moderation, Thomas L Friedman, transaction costs, trickle-down economics, vertical integration, Washington Consensus, WikiLeaks, yellow journalism, young professional

Most inequality studies had little to say about the super-rich, who are tiny in number and thus hard to capture in research surveys. But Piketty’s data also showed the share held by the very richest—the “0.001%,” as he called them—shooting up even more quickly. Echoing Bhagwati, not everyone viewed this widening gap as a problem. One theory—known as the Kuznets curve, after economist Simon Kuznets—suggests that rising inequality is transitory, as most countries become more unequal in their early stages of development and then less so as they grow rich. As a result, mainstream economists have often argued that inequality acts as a spur to effort and that in any case it will decline in time.


pages: 462 words: 129,022

People, Power, and Profits: Progressive Capitalism for an Age of Discontent by Joseph E. Stiglitz

affirmative action, Affordable Care Act / Obamacare, Alan Greenspan, AlphaGo, antiwork, barriers to entry, basic income, battle of ideas, behavioural economics, Berlin Wall, Bernie Madoff, Bernie Sanders, Big Tech, business cycle, Cambridge Analytica, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, carried interest, central bank independence, clean water, collective bargaining, company town, corporate governance, corporate social responsibility, creative destruction, Credit Default Swap, crony capitalism, DeepMind, deglobalization, deindustrialization, disinformation, disintermediation, diversified portfolio, Donald Trump, driverless car, Edward Snowden, Elon Musk, Erik Brynjolfsson, fake news, Fall of the Berlin Wall, financial deregulation, financial innovation, financial intermediation, Firefox, Fractional reserve banking, Francis Fukuyama: the end of history, full employment, George Akerlof, gig economy, Glass-Steagall Act, global macro, global supply chain, greed is good, green new deal, income inequality, information asymmetry, invisible hand, Isaac Newton, Jean Tirole, Jeff Bezos, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John von Neumann, Joseph Schumpeter, labor-force participation, late fees, low interest rates, low skilled workers, Mark Zuckerberg, market fundamentalism, mass incarceration, meta-analysis, minimum wage unemployment, moral hazard, new economy, New Urbanism, obamacare, opioid epidemic / opioid crisis, patent troll, Paul Samuelson, pension reform, Peter Thiel, postindustrial economy, price discrimination, principal–agent problem, profit maximization, purchasing power parity, race to the bottom, Ralph Nader, rent-seeking, Richard Thaler, Robert Bork, Robert Gordon, Robert Mercer, Robert Shiller, Robert Solow, Ronald Reagan, Savings and loan crisis, search costs, secular stagnation, self-driving car, shareholder value, Shoshana Zuboff, Silicon Valley, Simon Kuznets, South China Sea, sovereign wealth fund, speech recognition, Steve Bannon, Steve Jobs, surveillance capitalism, TED Talk, The Chicago School, The Future of Employment, The Great Moderation, the market place, The Rise and Fall of American Growth, the scientific method, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transaction costs, trickle-down economics, two-sided market, universal basic income, Unsafe at Any Speed, Upton Sinclair, uranium enrichment, War on Poverty, working-age population, Yochai Benkler

“Transcript of the Press Conference on the Release of the October 2017 World Economic Outlook” (Washington, DC: International Monetary Fund, Oct. 13, 2017); and Christine Lagarde, “2018 Article IV Consultation for the United States Opening Remarks” (Washington, DC: International Monetary Fund, June 14, 2018). 9.This was a central insight of Nobel Prize winner Simon Kuznets, and the fact that it always seemed so, as he wrote in the middle of the twentieth century, led it to be called Kuznets’s Law. 10.This book builds on my earlier work on globalization, financialization, inequality, and innovation, weaving these threads together, showing their interrelation in a tapestry that, I hope, is a convincing depiction of the sources of progress and the pitfalls that we’ve encountered along the way.


pages: 497 words: 143,175

Pivotal Decade: How the United States Traded Factories for Finance in the Seventies by Judith Stein

1960s counterculture, accelerated depreciation, activist lawyer, affirmative action, airline deregulation, Alan Greenspan, anti-communist, Ayatollah Khomeini, barriers to entry, Berlin Wall, blue-collar work, Bretton Woods, business cycle, capital controls, centre right, collective bargaining, Credit Default Swap, crony capitalism, David Ricardo: comparative advantage, deindustrialization, desegregation, do well by doing good, Dr. Strangelove, energy security, Fall of the Berlin Wall, falling living standards, feminist movement, financial deregulation, floating exchange rates, full employment, Glass-Steagall Act, Gunnar Myrdal, guns versus butter model, Ida Tarbell, income inequality, income per capita, intermodal, invisible hand, knowledge worker, laissez-faire capitalism, Les Trente Glorieuses, liberal capitalism, Long Term Capital Management, low interest rates, manufacturing employment, market bubble, Martin Wolf, new economy, Nixon triggered the end of the Bretton Woods system, oil shale / tar sands, oil shock, open economy, Paul Samuelson, payday loans, post-industrial society, post-oil, price mechanism, price stability, Ralph Nader, RAND corporation, reserve currency, Robert Gordon, Robert Solow, Ronald Reagan, Savings and loan crisis, Simon Kuznets, strikebreaker, three-martini lunch, trade liberalization, union organizing, urban planning, urban renewal, War on Poverty, Washington Consensus, working poor, Yom Kippur War

Gilbert Burck, “American Genius for Productivity,” Fortune (July 1955), 87. 4. Jack Metzgar, Striking Steel: Solidarity Remembered (Philadelphia: Temple University Press, 2000), 37. 5. Kenneth T. Jackson, Crabgrass Frontier, The Suburbanization of the United States (New York: Oxford University Press, 1985), 283–84. 6. Simon Kuznets, Share of Upper Income Groups in Income and Savings (New York: National Bureau of Economic Research, 1953); Joint Economic Committee, Productivity, Prices, and Incomes, 89th Cong., 2d sess. (Washington, D.C.: Government Printing Office, 1967). 7. Alfred E. Eckes Jr. and Thomas W. Zeiler, Globalization and the American Century (Cambridge: Cambridge University Press, 2003), 57–58. 8.


pages: 436 words: 76

Culture and Prosperity: The Truth About Markets - Why Some Nations Are Rich but Most Remain Poor by John Kay

Alan Greenspan, Albert Einstein, Asian financial crisis, Barry Marshall: ulcers, behavioural economics, Berlin Wall, Big bang: deregulation of the City of London, Bletchley Park, business cycle, California gold rush, Charles Babbage, complexity theory, computer age, constrained optimization, corporate governance, corporate social responsibility, correlation does not imply causation, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, Donald Trump, double entry bookkeeping, double helix, Dr. Strangelove, Dutch auction, Edward Lloyd's coffeehouse, electricity market, equity premium, equity risk premium, Ernest Rutherford, European colonialism, experimental economics, Exxon Valdez, failed state, Fairchild Semiconductor, financial innovation, flying shuttle, Ford Model T, Francis Fukuyama: the end of history, George Akerlof, George Gilder, Goodhart's law, Great Leap Forward, greed is good, Gunnar Myrdal, haute couture, Helicobacter pylori, illegal immigration, income inequality, industrial cluster, information asymmetry, intangible asset, invention of the telephone, invention of the wheel, invisible hand, John Meriwether, John Nash: game theory, John von Neumann, junk bonds, Kenneth Arrow, Kevin Kelly, knowledge economy, Larry Ellison, light touch regulation, Long Term Capital Management, loss aversion, Mahatma Gandhi, market bubble, market clearing, market fundamentalism, means of production, Menlo Park, Michael Milken, Mikhail Gorbachev, money: store of value / unit of account / medium of exchange, moral hazard, Myron Scholes, Naomi Klein, Nash equilibrium, new economy, oil shale / tar sands, oil shock, Pareto efficiency, Paul Samuelson, pets.com, Phillips curve, popular electronics, price discrimination, price mechanism, prisoner's dilemma, profit maximization, proprietary trading, purchasing power parity, QWERTY keyboard, Ralph Nader, RAND corporation, random walk, rent-seeking, Right to Buy, risk tolerance, road to serfdom, Robert Solow, Ronald Coase, Ronald Reagan, Savings and loan crisis, second-price auction, shareholder value, Silicon Valley, Simon Kuznets, South Sea Bubble, Steve Jobs, Stuart Kauffman, telemarketer, The Chicago School, The Market for Lemons, The Nature of the Firm, the new new thing, The Predators' Ball, The Wealth of Nations by Adam Smith, Thorstein Veblen, total factor productivity, transaction costs, tulip mania, urban decay, Vilfredo Pareto, Washington Consensus, women in the workforce, work culture , yield curve, yield management

Harsanyi USA 1994 Game theory Friedrich von Hayek Austria/ UK 1974 Economic systems James J. Heckman USA 2000 Econometrics John R. Hicks UK 1972 General equilibrium theory Daniel Kahneman USA 2002 Behavioral economics Leonid Vitaliyevich Kantorovich USSR 1975 Optimization modeling Lawrence R. Klein USA 1980 Econometrics Tjalling C. Koopmans USA Simon Kuznets USA 1975 Optimization modeling 1971 Empirical studies of economic growth Wassily Leontief USA 1973 Input-output analysis Appendix { 359} Name Country Year Subject Arthur Lewis UK 1979 Development economics Robert E. Lucas Jr. USA 1995 Real business cycle theory Harry M. Markowitz USA 1990 Finance theory Daniel L.


pages: 422 words: 131,666

Life Inc.: How the World Became a Corporation and How to Take It Back by Douglas Rushkoff

Abraham Maslow, Adam Curtis, addicted to oil, affirmative action, Alan Greenspan, Amazon Mechanical Turk, An Inconvenient Truth, anti-globalists, AOL-Time Warner, banks create money, Bear Stearns, benefit corporation, big-box store, Bretton Woods, car-free, Charles Lindbergh, colonial exploitation, Community Supported Agriculture, complexity theory, computer age, congestion pricing, corporate governance, credit crunch, currency manipulation / currency intervention, David Ricardo: comparative advantage, death of newspapers, digital divide, don't be evil, Donald Trump, double entry bookkeeping, easy for humans, difficult for computers, financial innovation, Firefox, full employment, General Motors Futurama, gentrification, Glass-Steagall Act, global village, Google Earth, greed is good, Herbert Marcuse, Howard Rheingold, income per capita, invention of the printing press, invisible hand, Jane Jacobs, John Nash: game theory, joint-stock company, Kevin Kelly, Kickstarter, laissez-faire capitalism, loss aversion, market bubble, market design, Marshall McLuhan, Milgram experiment, military-industrial complex, moral hazard, multilevel marketing, mutually assured destruction, Naomi Klein, negative equity, new economy, New Urbanism, Norbert Wiener, peak oil, peer-to-peer, place-making, placebo effect, planned obsolescence, Ponzi scheme, price mechanism, price stability, principal–agent problem, private military company, profit maximization, profit motive, prosperity theology / prosperity gospel / gospel of success, public intellectual, race to the bottom, RAND corporation, rent-seeking, RFID, road to serfdom, Ronald Reagan, scientific management, short selling, Silicon Valley, Simon Kuznets, social software, Steve Jobs, Telecommunications Act of 1996, telemarketer, The Wealth of Nations by Adam Smith, Thomas L Friedman, too big to fail, trade route, trickle-down economics, union organizing, urban decay, urban planning, urban renewal, Vannevar Bush, vertical integration, Victor Gruen, white flight, working poor, Works Progress Administration, Y2K, young professional, zero-sum game

The less people spend on killing roaches, the worse it is for the economy by corporate and government measures. The universal metric of our economy’s health is the GDP, a tool devised by the National Bureau of Economic Research to help the Hoover administration navigate out of the Great Depression. Even the economist charged with developing the metric, Simon Kuznets, saw the limitations of the policy tool he had created, and spoke to Congress quite candidly of the many dimensions of the economy left out of his crude measure. Burning less gas, eating at home, enjoying neighbors, playing cards, and walking to work all subtract from the GDP, at least in the short term.


pages: 470 words: 130,269

The Marginal Revolutionaries: How Austrian Economists Fought the War of Ideas by Janek Wasserman

"World Economic Forum" Davos, Abraham Wald, Albert Einstein, American Legislative Exchange Council, anti-communist, battle of ideas, Berlin Wall, Bretton Woods, business cycle, collective bargaining, Corn Laws, correlation does not imply causation, creative destruction, David Ricardo: comparative advantage, different worldview, Donald Trump, experimental economics, Fall of the Berlin Wall, floating exchange rates, Fractional reserve banking, Francis Fukuyama: the end of history, full employment, Gunnar Myrdal, housing crisis, Internet Archive, invisible hand, John von Neumann, Joseph Schumpeter, laissez-faire capitalism, liberal capitalism, low interest rates, market fundamentalism, mass immigration, means of production, Menlo Park, military-industrial complex, Mont Pelerin Society, New Journalism, New Urbanism, old-boy network, Paul Samuelson, Philip Mirowski, price mechanism, price stability, public intellectual, RAND corporation, random walk, rent control, road to serfdom, Robert Bork, rolodex, Ronald Coase, Ronald Reagan, Silicon Valley, Simon Kuznets, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, trade liberalization, union organizing, urban planning, Vilfredo Pareto, Washington Consensus, zero-sum game, éminence grise

The atmosphere of industrial revolutions—of ‘progress’—is the only one in which capitalism can survive.”23 Despite the book’s sweeping scope, vast erudition, and hortatory rhetoric, Business Cycles misfired. The academic community lavished praise on its ambition—Oskar Lange grouping it in “intention and horizon” with Marx’s Kapital—yet few read the work and fewer still deemed it an important contribution. Schumpeter, Simon Kuznets argued, had not produced the “exact economics” to which he aspired, nor had he reconciled economic, statistical, and historical approaches successfully. At a 1939 workshop at Harvard, it became clear that nobody had studied the book, which exasperated the vain Schumpeter. He viewed Business Cycles as his magnum opus, which would confirm his status as the era’s greatest economist.


The Hour of Fate by Susan Berfield

bank run, buy and hold, capital controls, collective bargaining, company town, Cornelius Vanderbilt, death from overwork, friendly fire, Howard Zinn, Ida Tarbell, income inequality, new economy, plutocrats, Ralph Waldo Emerson, Simon Kuznets, strikebreaker, the market place, transcontinental railway, wage slave, working poor

Located on Fifth Avenue: Details from “In New Quarters,” New York Sun, March 5, 1881; 1901 Union League Club Annual Report; Henry Bellows, Union League Club History; “Lost Union League Clubhouse,” daytoninmanhattan.com. 12. Morgan’s first father-in-law: Jonathan Sturges, father of Morgan’s first wife, Amelia Sturges. 13. Gross national product: Simon Kuznets, Capital in the American Economy: Its Formation and Financing (Princeton, NJ: Princeton University Press, 1961), 557–58. 14. “Vexatious” legislation: “The Financial Situation,” New York Sun, December 31, 1900, 7. 15. More than twelve hundred: Lewis L. Gould, Reform and Regulation: American Politics from Roosevelt to Wilson, 16. 16.


pages: 621 words: 157,263

How to Change the World: Reflections on Marx and Marxism by Eric Hobsbawm

anti-communist, banking crisis, battle of ideas, Berlin Wall, British Empire, continuation of politics by other means, creative destruction, currency manipulation / currency intervention, deindustrialization, discovery of the americas, experimental subject, Fall of the Berlin Wall, full employment, Gunnar Myrdal, Herbert Marcuse, labour market flexibility, liberal capitalism, market fundamentalism, mass immigration, means of production, new economy, public intellectual, Simon Kuznets, Thorstein Veblen, Upton Sinclair, upwardly mobile, Vilfredo Pareto, zero-sum game

Even the natural sciences came under attack, not only because of the potential or actual damage caused by technology, but because their validity as modes of understanding the world was questioned. This was perhaps least marked in economics, where Marxists had always been peripheral, though among the first ten Nobel laureates in this field there were three who were formed or partly formed in the early years of the Soviet Union or who were still active there (Wassily Leontief, Simon Kuznets, Leonid Kantorovitch). However, from 1974, when Friedrich von Hayek received the prize, still balanced by his ideological opposite, the Swede Gunnar Myrdal, and 1976, when it was given to Milton Friedman, it became markedly identified with a sharp turn away from Keynesian and other interventionist theories and a return to an increasingly uncompromising laissez-faire.


pages: 653 words: 155,847

Energy: A Human History by Richard Rhodes

Albert Einstein, animal electricity, California gold rush, Cesare Marchetti: Marchetti’s constant, Copley Medal, dark matter, David Ricardo: comparative advantage, decarbonisation, demographic transition, Dmitri Mendeleev, Drosophila, Edmond Halley, energy transition, Ernest Rutherford, Fellow of the Royal Society, flex fuel, Ford Model T, Garrett Hardin, gentrification, Great Leap Forward, Ida Tarbell, income inequality, Intergovernmental Panel on Climate Change (IPCC), invention of the steam engine, invisible hand, Isaac Newton, James Watt: steam engine, joint-stock company, Menlo Park, Michael Shellenberger, Mikhail Gorbachev, new economy, nuclear winter, off-the-grid, oil rush, oil shale / tar sands, oil shock, peak oil, Ralph Nader, Richard Feynman, Ronald Reagan, selection bias, Simon Kuznets, tacit knowledge, Ted Nordhaus, The Rise and Fall of American Growth, Thomas Malthus, Thorstein Veblen, tontine, Tragedy of the Commons, uranium enrichment, urban renewal, Vanguard fund, working poor, young professional

When they examined the relationship between the level of air pollution and increasing income in a cross section of urban areas in forty-two countries, they found that for two pollutants—sulfur dioxide and “smoke”—concentrations increased with per capita gross domestic product (GDP) at low national income levels but decreased with GDP growth at higher levels of income.35 The graph of the SO2 finding in their influential 1991 paper looks like this: Smog obscuring the George Washington Bridge, New York City, 1973. The curve on the Princeton economists’ graph happened to resemble a Kuznets curve, a visualization of a controversial economic theory named after the twentieth-century Belarussian American economist Simon Kuznets. Kuznets had related increasing income and income inequality, a different relationship entirely. The Princeton economists’ version thus came to be called an environmental Kuznets curve (EKC). In its standard form, it looks like this: Environmental Kuznets curve. An environmental Kuznets curve models a relationship such as the one the Princeton economists had found: increasing pollution in the earlier stages of industrialization and then, at a threshold point of rising personal income, increasing efforts to reduce pollution.


pages: 554 words: 158,687

Profiting Without Producing: How Finance Exploits Us All by Costas Lapavitsas

Alan Greenspan, Andrei Shleifer, asset-backed security, bank run, banking crisis, Basel III, Bear Stearns, borderless world, Branko Milanovic, Bretton Woods, business cycle, capital controls, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, computer age, conceptual framework, corporate governance, credit crunch, Credit Default Swap, David Graeber, David Ricardo: comparative advantage, disintermediation, diversified portfolio, Erik Brynjolfsson, eurozone crisis, everywhere but in the productivity statistics, false flag, financial deregulation, financial independence, financial innovation, financial intermediation, financial repression, Flash crash, full employment, general purpose technology, Glass-Steagall Act, global value chain, global village, High speed trading, Hyman Minsky, income inequality, inflation targeting, informal economy, information asymmetry, intangible asset, job satisfaction, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, liberal capitalism, London Interbank Offered Rate, low interest rates, low skilled workers, M-Pesa, market bubble, means of production, Minsky moment, Modern Monetary Theory, Money creation, money market fund, moral hazard, mortgage debt, Network effects, new economy, oil shock, open economy, pensions crisis, post-Fordism, Post-Keynesian economics, price stability, Productivity paradox, profit maximization, purchasing power parity, quantitative easing, quantitative trading / quantitative finance, race to the bottom, regulatory arbitrage, reserve currency, Robert Shiller, Robert Solow, savings glut, Scramble for Africa, secular stagnation, shareholder value, Simon Kuznets, special drawing rights, Thales of Miletus, The Chicago School, The Great Moderation, the payments system, The Wealth of Nations by Adam Smith, Tobin tax, too big to fail, total factor productivity, trade liberalization, transaction costs, union organizing, value at risk, Washington Consensus, zero-sum game

Quigley, NY: Russell Sage Foundation, 2006, pp. 221–58; Facundo Alvaredo and Emmanuel Saez, ‘Income and Wealth Concentration in Spain from a Historical and Fiscal Perspective’, Journal of the European Economic Association 7:5, 2009, pp. 1140–67; Anthony Atkinson, Thomas Piketty, and Emmanuel Saez, ‘Top Incomes in the Long Run of History’, Journal of Economic Literature 49:1, 2011, pp. 3–71. 23 Simon Kuznets, ‘Economic Growth and Income Inequality’, American Economic Review 45:1, 1955. 24 Branko Milanovic has produced innovative work that assesses global inequality by measuring within-country as well as across-country inequality. The top 10 percent of the income distribution in a poor developing country, after all, might have a lower average income than the bottom 10 percent of a rich developed country.


pages: 807 words: 154,435

Radical Uncertainty: Decision-Making for an Unknowable Future by Mervyn King, John Kay

Airbus A320, Alan Greenspan, Albert Einstein, Albert Michelson, algorithmic trading, anti-fragile, Antoine Gombaud: Chevalier de Méré, Arthur Eddington, autonomous vehicles, availability heuristic, banking crisis, Barry Marshall: ulcers, battle of ideas, Bear Stearns, behavioural economics, Benoit Mandelbrot, bitcoin, Black Swan, Boeing 737 MAX, Bonfire of the Vanities, Brexit referendum, Brownian motion, business cycle, business process, capital asset pricing model, central bank independence, collapse of Lehman Brothers, correlation does not imply causation, credit crunch, cryptocurrency, cuban missile crisis, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, DeepMind, demographic transition, discounted cash flows, disruptive innovation, diversification, diversified portfolio, Donald Trump, Dutch auction, easy for humans, difficult for computers, eat what you kill, Eddington experiment, Edmond Halley, Edward Lloyd's coffeehouse, Edward Thorp, Elon Musk, Ethereum, Eugene Fama: efficient market hypothesis, experimental economics, experimental subject, fear of failure, feminist movement, financial deregulation, George Akerlof, germ theory of disease, Goodhart's law, Hans Rosling, Helicobacter pylori, high-speed rail, Ignaz Semmelweis: hand washing, income per capita, incomplete markets, inflation targeting, information asymmetry, invention of the wheel, invisible hand, Jeff Bezos, Jim Simons, Johannes Kepler, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Snow's cholera map, John von Neumann, Kenneth Arrow, Kōnosuke Matsushita, Linda problem, Long Term Capital Management, loss aversion, Louis Pasteur, mandelbrot fractal, market bubble, market fundamentalism, military-industrial complex, Money creation, Moneyball by Michael Lewis explains big data, Monty Hall problem, Nash equilibrium, Nate Silver, new economy, Nick Leeson, Northern Rock, nudge theory, oil shock, PalmPilot, Paul Samuelson, peak oil, Peter Thiel, Philip Mirowski, Phillips curve, Pierre-Simon Laplace, popular electronics, power law, price mechanism, probability theory / Blaise Pascal / Pierre de Fermat, quantitative trading / quantitative finance, railway mania, RAND corporation, reality distortion field, rent-seeking, Richard Feynman, Richard Thaler, risk tolerance, risk-adjusted returns, Robert Shiller, Robert Solow, Ronald Coase, sealed-bid auction, shareholder value, Silicon Valley, Simon Kuznets, Socratic dialogue, South Sea Bubble, spectrum auction, Steve Ballmer, Steve Jobs, Steve Wozniak, Suez crisis 1956, Tacoma Narrows Bridge, Thales and the olive presses, Thales of Miletus, The Chicago School, the map is not the territory, The Market for Lemons, The Nature of the Firm, The Signal and the Noise by Nate Silver, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Bayes, Thomas Davenport, Thomas Malthus, Toyota Production System, transaction costs, ultimatum game, urban planning, value at risk, world market for maybe five computers, World Values Survey, Yom Kippur War, zero-sum game

The R&A is the rule-making spin-off from the Royal and Ancient Golf Club of St Andrews, which maintains the world-famous links of that town. 3 Carter (2019). 4 Kelvin was the great physicist whom we met in chapter 3 dismissing the possibility of manned flight. 5 Knight (1940) fn. 10. 6 McCoy, Prelec and Seung (2017). 7 Goldstein and Gigerenzer (2002) p. 76. 8 Lenin (1909) p. 397. 9 Kahneman (2011) pp. 156–8. 10 Ibid. p. 158. 11 Carroll and Gardner (2000) p. 155. 12 Carroll and Gardner (2000) pp. 157–64. 13 We take comfort from the knowledge that one of the doyens of classical statistics, Maurice Kendall, used the same analogy with Carroll sixty years ago and added, ‘if you think all this is ridiculous and beneath the notice of grave and serious-minded adults, you may care to know that the students of the theory of probability are still discussing the question whether one can take an even chance on the truth of any proposition whose meaning is not known’ (quoted in Shackle 1968, p. 35). 14 Lucas (1988), published (2011) p. 4. 15 Cochrane (2009). 16 Romer (2015). 17 Carroll and Gardner (2000) pp. 225–6. 18 GDP is a construct, created by national statistical agencies, and derived from many thousands of data points drawn from a multiplicity of sources. The principles of the estimation of GDP were established in the late 1930s and early 1940s, by the American Simon Kuznets and the British economists Richard Stone and James Meade. These principles have subsequently been greatly elaborated by statisticians around the world, and today there is a United Nations System of Standardised National Accounts, a weighty document which is subject to regular revision and whose procedures are followed in statistical agencies in all major countries.


pages: 547 words: 172,226

Why Nations Fail: The Origins of Power, Prosperity, and Poverty by Daron Acemoglu, James Robinson

Admiral Zheng, agricultural Revolution, Albert Einstein, Andrei Shleifer, Atahualpa, banking crisis, Bartolomé de las Casas, Berlin Wall, blood diamond, bread and circuses, BRICs, British Empire, central bank independence, clean water, collective bargaining, colonial rule, conceptual framework, Corn Laws, Cornelius Vanderbilt, creative destruction, crony capitalism, Deng Xiaoping, desegregation, discovery of the americas, en.wikipedia.org, European colonialism, failed state, Fall of the Berlin Wall, falling living standards, financial independence, financial innovation, financial intermediation, flying shuttle, Francis Fukuyama: the end of history, Francisco Pizarro, full employment, Great Leap Forward, household responsibility system, Ida Tarbell, income inequality, income per capita, indoor plumbing, invention of movable type, invisible hand, James Hargreaves, James Watt: steam engine, Jeff Bezos, joint-stock company, Joseph Schumpeter, Kickstarter, land reform, low interest rates, mass immigration, Mikhail Gorbachev, minimum wage unemployment, Mohammed Bouazizi, Paul Samuelson, price stability, profit motive, Robert Solow, Rosa Parks, Scramble for Africa, seminal paper, Simon Kuznets, spice trade, spinning jenny, Steve Ballmer, Steve Jobs, Suez canal 1869, trade liberalization, trade route, transatlantic slave trade, union organizing, upwardly mobile, W. E. B. Du Bois, Washington Consensus, working poor

But it wasn’t, because the government then forcibly converted all the dollar bank accounts into pesos, but at the old one-for-one exchange rate. Someone who had had $1,000 saved suddenly found himself with only $250. The government had expropriated three-quarters of people’s savings. For economists, Argentina is a perplexing country. To illustrate how difficult it was to understand Argentina, the Nobel Prize–winning economist Simon Kuznets once famously remarked that there were four sorts of countries: developed, underdeveloped, Japan, and Argentina. Kuznets thought so because, around the time of the First World War, Argentina was one of the richest countries in the world. It then began a steady decline relative to the other rich countries in Western Europe and North America, which turned, in the 1970s and ’80s, into an absolute decline.


pages: 566 words: 163,322

The Rise and Fall of Nations: Forces of Change in the Post-Crisis World by Ruchir Sharma

"World Economic Forum" Davos, Asian financial crisis, backtesting, bank run, banking crisis, Berlin Wall, Bernie Sanders, BRICs, business climate, business cycle, business process, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, centre right, colonial rule, commodity super cycle, corporate governance, creative destruction, crony capitalism, currency peg, dark matter, debt deflation, deglobalization, deindustrialization, demographic dividend, demographic transition, Deng Xiaoping, Doha Development Round, Donald Trump, driverless car, Edward Glaeser, Elon Musk, eurozone crisis, failed state, Fall of the Berlin Wall, falling living standards, financial engineering, Francis Fukuyama: the end of history, Freestyle chess, Gini coefficient, global macro, Goodhart's law, guns versus butter model, hiring and firing, hype cycle, income inequality, indoor plumbing, industrial robot, inflation targeting, Internet of things, Japanese asset price bubble, Jeff Bezos, job automation, John Markoff, Joseph Schumpeter, junk bonds, Kenneth Rogoff, Kickstarter, knowledge economy, labor-force participation, Larry Ellison, lateral thinking, liberal capitalism, low interest rates, Malacca Straits, Mark Zuckerberg, market bubble, Mary Meeker, mass immigration, megacity, megaproject, Mexican peso crisis / tequila crisis, middle-income trap, military-industrial complex, mittelstand, moral hazard, New Economic Geography, North Sea oil, oil rush, oil shale / tar sands, oil shock, open immigration, pattern recognition, Paul Samuelson, Peter Thiel, pets.com, plutocrats, Ponzi scheme, price stability, Productivity paradox, purchasing power parity, quantitative easing, Ralph Waldo Emerson, random walk, rent-seeking, reserve currency, Ronald Coase, Ronald Reagan, savings glut, secular stagnation, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, Simon Kuznets, smart cities, Snapchat, South China Sea, sovereign wealth fund, special economic zone, spectrum auction, Steve Jobs, tacit knowledge, tech billionaire, The Future of Employment, The Wisdom of Crowds, Thomas Malthus, total factor productivity, trade liberalization, trade route, tulip mania, Tyler Cowen: Great Stagnation, unorthodox policies, Washington Consensus, WikiLeaks, women in the workforce, work culture , working-age population

Some world leaders still tend to dismiss vices like inequality, and the corruption that often feeds it, as timeless and inevitable sins that are common to all countries, particularly poor ones in the chaotic early stages of development. But this is a cop-out. Developing societies do tend to be more unequal than rich ones, but it is increasingly unclear that their inequality problem will naturally disappear. The belief that inequality fades over time had been the working assumption since the 1950s, when the economist Simon Kuznets pointed out that countries tend to grow more unequal in the early stages of development, as some poor farmers move to better-paying factory jobs in the cities, and less unequal in the later stages, as the urban middle class grows. Today, however, inequality appears to be rising at all stages of development: in poor, middle-class, and rich countries.


pages: 580 words: 168,476

The Price of Inequality: How Today's Divided Society Endangers Our Future by Joseph E. Stiglitz

affirmative action, Affordable Care Act / Obamacare, airline deregulation, Alan Greenspan, Andrei Shleifer, banking crisis, barriers to entry, Basel III, battle of ideas, Bear Stearns, behavioural economics, Berlin Wall, business cycle, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, collapse of Lehman Brothers, collective bargaining, colonial rule, corporate governance, Credit Default Swap, Daniel Kahneman / Amos Tversky, Dava Sobel, declining real wages, deskilling, electricity market, Exxon Valdez, Fall of the Berlin Wall, financial deregulation, financial innovation, Flash crash, framing effect, full employment, George Akerlof, Gini coefficient, Glass-Steagall Act, Great Leap Forward, income inequality, income per capita, indoor plumbing, inflation targeting, information asymmetry, invisible hand, jobless men, John Bogle, John Harrison: Longitude, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Arrow, Kenneth Rogoff, London Interbank Offered Rate, lone genius, low interest rates, low skilled workers, Marc Andreessen, Mark Zuckerberg, market bubble, market fundamentalism, mass incarceration, medical bankruptcy, microcredit, moral hazard, mortgage tax deduction, negative equity, obamacare, offshore financial centre, paper trading, Pareto efficiency, patent troll, Paul Samuelson, Paul Volcker talking about ATMs, payday loans, Phillips curve, price stability, profit maximization, profit motive, public intellectual, purchasing power parity, race to the bottom, rent-seeking, reserve currency, Richard Thaler, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, Savings and loan crisis, search costs, shareholder value, short selling, Silicon Valley, Simon Kuznets, spectrum auction, Steve Jobs, stock buybacks, subprime mortgage crisis, technology bubble, The Chicago School, The Fortune at the Bottom of the Pyramid, The Myth of the Rational Market, The Spirit Level, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, Tragedy of the Commons, transaction costs, trickle-down economics, ultimatum game, uranium enrichment, very high income, We are the 99%, wealth creators, women in the workforce, zero-sum game

Stiglitz, Mismeasuring Our Lives: Why GDP Doesn’t Add Up (New York: New Press, 2010), and available at http://www.stiglitz-sen-fitoussi.fr/en/index.htm. (Translations are available in Chinese, Korean, Italian, and other languages.) 75. This point was made right at the start, by the early developer of the national income accounts, Simon Kuznets, who noted that “the welfare of a nation can scarcely be inferred from a measure of national income.” Kuznets, “National Income, 1929–1932,” 73rd U.S. Cong., 2d sess., 1934, Senate doc. no. 124, p. 7. Chapter Seven JUSTICE FOR ALL? HOW INEQUALITY IS ERODING THE RULE OF LAW 1. There are many instances where laws can be seen as preserving inequities.


Termites of the State: Why Complexity Leads to Inequality by Vito Tanzi

accounting loophole / creative accounting, Affordable Care Act / Obamacare, Alan Greenspan, Andrei Shleifer, Andrew Keen, Asian financial crisis, asset allocation, barriers to entry, basic income, behavioural economics, bitcoin, Black Swan, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Cass Sunstein, central bank independence, centre right, clean water, crony capitalism, David Graeber, David Ricardo: comparative advantage, deindustrialization, Donald Trump, Double Irish / Dutch Sandwich, experimental economics, financial engineering, financial repression, full employment, George Akerlof, Gini coefficient, Gunnar Myrdal, high net worth, hiring and firing, illegal immigration, income inequality, indoor plumbing, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jean Tirole, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Arrow, Kenneth Rogoff, knowledge economy, labor-force participation, libertarian paternalism, Long Term Capital Management, low interest rates, market fundamentalism, means of production, military-industrial complex, moral hazard, Naomi Klein, New Urbanism, obamacare, offshore financial centre, open economy, Pareto efficiency, Paul Samuelson, Phillips curve, price stability, principal–agent problem, profit maximization, pushing on a string, quantitative easing, rent control, rent-seeking, Richard Thaler, road to serfdom, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, Second Machine Age, secular stagnation, self-driving car, Silicon Valley, Simon Kuznets, synthetic biology, The Chicago School, The Great Moderation, The Market for Lemons, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, transfer pricing, Tyler Cowen: Great Stagnation, universal basic income, unorthodox policies, urban planning, very high income, Vilfredo Pareto, War on Poverty, Washington Consensus, women in the workforce

I had also spent another two years working for a CongressionalPresidential Commission (the Outdoor Recreation Resources Review Commission) that was tasked with determining the optimal use for the extensive public land owned by the US federal government. This commission produced several reports that set the stage for the future use of public land. During the years I spent at Harvard, in the first half of the 1960s, some of the leading economists of the time – Paul Samuelson, Robert Solow, Simon Kuznets, Kenneth Arrow, Franco Modigliani, Wassily Leontief, Kenneth Galbraith, Robert Dorfman, Alvin Hansen, Otto Eckstein, James Duesenberry, and several others – were in the Boston area, either at Harvard or at MIT. Richard Musgrave, who was then considered the leading public finance economist in the United States, would come to Harvard a little later and would be the second reader of my doctoral dissertation; I thus completed my public finance preparation under a third refugee from Nazi Germany.


Money and Government: The Past and Future of Economics by Robert Skidelsky

"Friedman doctrine" OR "shareholder theory", Alan Greenspan, anti-globalists, Asian financial crisis, asset-backed security, bank run, banking crisis, banks create money, barriers to entry, Basel III, basic income, Bear Stearns, behavioural economics, Ben Bernanke: helicopter money, Big bang: deregulation of the City of London, book value, Bretton Woods, British Empire, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, collective bargaining, constrained optimization, Corn Laws, correlation does not imply causation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, David Graeber, David Ricardo: comparative advantage, debt deflation, Deng Xiaoping, Donald Trump, Eugene Fama: efficient market hypothesis, eurozone crisis, fake news, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, forward guidance, Fractional reserve banking, full employment, Gini coefficient, Glass-Steagall Act, Goodhart's law, Growth in a Time of Debt, guns versus butter model, Hyman Minsky, income inequality, incomplete markets, inflation targeting, invisible hand, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kenneth Rogoff, Kondratiev cycle, labour market flexibility, labour mobility, land bank, law of one price, liberal capitalism, light touch regulation, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, long and variable lags, low interest rates, market clearing, market friction, Martin Wolf, means of production, Meghnad Desai, Mexican peso crisis / tequila crisis, mobile money, Modern Monetary Theory, Money creation, Mont Pelerin Society, moral hazard, mortgage debt, new economy, Nick Leeson, North Sea oil, Northern Rock, nudge theory, offshore financial centre, oil shock, open economy, paradox of thrift, Pareto efficiency, Paul Samuelson, Phillips curve, placebo effect, post-war consensus, price stability, profit maximization, proprietary trading, public intellectual, quantitative easing, random walk, regulatory arbitrage, rent-seeking, reserve currency, Richard Thaler, rising living standards, risk/return, road to serfdom, Robert Shiller, Ronald Reagan, savings glut, secular stagnation, shareholder value, short selling, Simon Kuznets, structural adjustment programs, technological determinism, The Chicago School, The Great Moderation, the payments system, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, tontine, too big to fail, trade liberalization, value at risk, Washington Consensus, yield curve, zero-sum game

Share of US income going to the top36 25 20 (per cent) Share of the different groups in total income 15 10 5 0 1910 Top 1% (annual incomes above $352,000 in 2010) Top 5%–1% (annual incomes between $150,000 and $352,000 in 2010) Top 10%–5% (annual incomes between $108,000 and $150,000 in 2010) 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 means that inequality will rise even more. Piketty predicts that growth will not exceed 1–1.5 per cent in the long-run, whereas the average return on capital will be 4–5 per cent. (This contrasts with the predictions of the American statistician Simon Kuznets, whose data – dating from 1955 – showed inequality naturally diminishing over time.) Using large data sets, Piketty presented a U-shaped curve running from the late nineteenth century to today, with a ‘compression’ of inequality between 1914 and 1970. It is a sign of the importance of Piketty’s intervention that it provoked a furious debate.


pages: 637 words: 199,158

The Tragedy of Great Power Politics by John J. Mearsheimer

active measures, Berlin Wall, Bretton Woods, British Empire, colonial rule, continuation of politics by other means, deindustrialization, discrete time, disinformation, Dissolution of the Soviet Union, Francis Fukuyama: the end of history, guns versus butter model, Herman Kahn, illegal immigration, long peace, Mikhail Gorbachev, Monroe Doctrine, mutually assured destruction, oil shock, Pareto efficiency, RAND corporation, Ronald Reagan, Simon Kuznets, South China Sea, Suez canal 1869, The Wealth of Nations by Adam Smith, Thomas L Friedman, Yom Kippur War

Organski, Population and World Power (New York: Knopf, 1961); and Michael S. Teitelbaum and Jay M. Winter, The Fear of Population Decline (Orlando, FL: Academic Press, 1985). 20. The Chinese and Russian figures are from World Bank Atlas, 2000 (Washington, DC: World Bank, April 2000), pp. 24–25. The U.S. figure is from the Census Bureau. 21. Simon Kuznets, Modern Economic Growth: Rate, Structure, and Spread (New Haven, CT: Yale University Press, 1966), chap. 2. 22. On the importance of wealth for military might, see Robert Gilpin, War and Change in World Politics (Cambridge: Cambridge University Press, 1981); Paul M. Kennedy, The Rise and Fall of British Naval Mastery (London: Allen Lane, 1976); Paul M.


pages: 789 words: 207,744

The Patterning Instinct: A Cultural History of Humanity's Search for Meaning by Jeremy Lent

Admiral Zheng, agricultural Revolution, Albert Einstein, Alfred Russel Wallace, Anthropocene, Atahualpa, Benoit Mandelbrot, Bretton Woods, British Empire, Buckminster Fuller, Capital in the Twenty-First Century by Thomas Piketty, cognitive dissonance, commoditize, complexity theory, conceptual framework, dematerialisation, demographic transition, different worldview, Doomsday Book, Easter island, en.wikipedia.org, European colonialism, failed state, Firefox, Ford Model T, Francisco Pizarro, Garrett Hardin, Georg Cantor, Great Leap Forward, Hans Moravec, happiness index / gross national happiness, hedonic treadmill, income inequality, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invention of gunpowder, invention of writing, Isaac Newton, Jevons paradox, Johann Wolfgang von Goethe, Johannes Kepler, language acquisition, Lao Tzu, Law of Accelerating Returns, mandelbrot fractal, mass immigration, megacity, Metcalfe's law, Mikhail Gorbachev, move 37, Neil Armstrong, Nicholas Carr, Nick Bostrom, Norbert Wiener, oil shale / tar sands, out of africa, peak oil, Pierre-Simon Laplace, Plato's cave, QWERTY keyboard, Ray Kurzweil, Robert Solow, Sapir-Whorf hypothesis, scientific management, Scientific racism, scientific worldview, seminal paper, shareholder value, sharing economy, Silicon Valley, Simon Kuznets, social intelligence, South China Sea, Stephen Hawking, Steven Pinker, Stuart Kauffman, synthetic biology, systems thinking, technological singularity, the scientific method, The Theory of the Leisure Class by Thorstein Veblen, theory of mind, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, Thorstein Veblen, Tragedy of the Commons, Turing test, ultimatum game, urban sprawl, Vernor Vinge, wikimedia commons

“Big ideas,” McNeil observes, “all became orthodoxies, enmeshed in social and political systems, and difficult to dislodge even if they became costly.”68* The “Hedonic Treadmill” A powerful example of ideological lock-in is the standard of gross domestic product (GDP), by which the performance of governments and countries is judged across the world. The economist who invented it in the 1930s, Simon Kuznets, warned that it was a “potentially dangerous oversimplification that could be misleading” and subject to “resulting abuse.” However, in the aftermath of World War II, as the world was gearing up for the Great Acceleration, GDP was formally incorporated into official policy making.69 The basic fault with GDP as a measure of a country's performance is that it fails to distinguish between activities that promote welfare and those that reduce it.


pages: 840 words: 202,245

Age of Greed: The Triumph of Finance and the Decline of America, 1970 to the Present by Jeff Madrick

Abraham Maslow, accounting loophole / creative accounting, Alan Greenspan, AOL-Time Warner, Asian financial crisis, bank run, Bear Stearns, book value, Bretton Woods, business cycle, capital controls, Carl Icahn, collapse of Lehman Brothers, collateralized debt obligation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency risk, desegregation, disintermediation, diversified portfolio, Donald Trump, financial deregulation, fixed income, floating exchange rates, Frederick Winslow Taylor, full employment, George Akerlof, Glass-Steagall Act, Greenspan put, Hyman Minsky, income inequality, index fund, inflation targeting, inventory management, invisible hand, John Bogle, John Meriwether, junk bonds, Kitchen Debate, laissez-faire capitalism, locking in a profit, Long Term Capital Management, low interest rates, market bubble, Mary Meeker, Michael Milken, minimum wage unemployment, MITM: man-in-the-middle, Money creation, money market fund, Mont Pelerin Society, moral hazard, mortgage debt, Myron Scholes, new economy, Nixon triggered the end of the Bretton Woods system, North Sea oil, Northern Rock, oil shock, Paul Samuelson, Philip Mirowski, Phillips curve, price stability, quantitative easing, Ralph Nader, rent control, road to serfdom, Robert Bork, Robert Shiller, Ronald Coase, Ronald Reagan, Ronald Reagan: Tear down this wall, scientific management, shareholder value, short selling, Silicon Valley, Simon Kuznets, tail risk, Tax Reform Act of 1986, technology bubble, Telecommunications Act of 1996, The Chicago School, The Great Moderation, too big to fail, union organizing, V2 rocket, value at risk, Vanguard fund, War on Poverty, Washington Consensus, Y2K, Yom Kippur War

He helped develop the nation’s tax withholding system, which made possible the rapid growth of government that he ultimately deplored. There is no greater irony in American economic history. He later said his experience in government reinforced his doubts about its efficiency. Friedman received his Ph.D. from Columbia in 1945. His doctoral thesis already contained conservative claims. Written with the future Nobelist Simon Kuznets, it was titled “Income from Independent Professional Practice,” and argued that state limitations on the number of entrants, even if the desire is to maintain a high standard, into professions like medicine, dentistry, and law raised fees artificially and reduced the accessibility of the professional services.


pages: 1,060 words: 265,296

Wealth and Poverty of Nations by David S. Landes

Admiral Zheng, affirmative action, agricultural Revolution, Atahualpa, Ayatollah Khomeini, Bartolomé de las Casas, book value, British Empire, business cycle, Cape to Cairo, classic study, clean water, colonial rule, Columbian Exchange, computer age, David Ricardo: comparative advantage, deindustrialization, deskilling, European colonialism, Fellow of the Royal Society, financial intermediation, Francisco Pizarro, germ theory of disease, glass ceiling, high-speed rail, illegal immigration, income inequality, Index librorum prohibitorum, interchangeable parts, invention of agriculture, invention of movable type, invisible hand, Isaac Newton, it's over 9,000, James Watt: steam engine, John Harrison: Longitude, joint-stock company, Just-in-time delivery, Kenneth Arrow, land tenure, lateral thinking, Lewis Mumford, mass immigration, Mexican peso crisis / tequila crisis, MITM: man-in-the-middle, Monroe Doctrine, Murano, Venice glass, new economy, New Urbanism, North Sea oil, out of africa, passive investing, Paul Erdős, Paul Samuelson, Philip Mirowski, rent-seeking, Right to Buy, Robert Solow, Savings and loan crisis, Scramble for Africa, Simon Kuznets, South China Sea, spice trade, spinning jenny, Suez canal 1869, The Wealth of Nations by Adam Smith, trade route, transaction costs, transatlantic slave trade, Vilfredo Pareto, zero-sum game

Also my colleagues in departments of economics and history in Columbia University (Carter Goodrich, Fritz Stern, Albert Hart, and George Stigler especially); in the University of California at Berkeley (Kenneth Stampp, Hans Rosenberg, Richard Herr, Carlo Cipolla, Henry Rosovsky, and Albert Fishlow especially); and at Harvard (Simon Kuznets, C. Crane Brinton, Alexander Gerschenkron, Richard Pipes, David and Aida Donald, Benjamin Schwartz, Harvey Leibenstein, Robert Fogel, Zvi Griliches, Dale Jorgensen, Amartya Sen, Ray Vernon, Robert Barro, Jeff Sachs, Jess Williamson, Claudia Goldin, Daniel Bell, Nathan Glazer, Talcott Parsons, Brad DeLong, Patrice Higonnet, Martin Peretz, Judith Vichniac, Stephen Marglin, Winnie Rothenberg).

To this day, British buyers of electrical appliances must deal with a diversity o f plugs and outlets, and customers pay shopkeepers to ready equipment for use. The British economy grew in these new branches as it had in the old—like Topsy. This marriage o f science and technique opened an era that Simon Kuznets called "modern economic growth." It was not only the ex14 T H E WEALTH OF K N O W L E D G E 285 traordinary cluster of innovations that made the Second Industrial Rev­ olution so important—the use o f liquid and gaseous fuels in internal combustion engines, the distribution o f energy and power via electric current, the systematic transformation o f matter, improved communi­ cations (telephone and radio), the invention of machines driven by the new sources of power (motor vehicles and domestic appliances).


pages: 879 words: 233,093

The Empathic Civilization: The Race to Global Consciousness in a World in Crisis by Jeremy Rifkin

Abraham Maslow, agricultural Revolution, Albert Einstein, animal electricity, back-to-the-land, British Empire, carbon footprint, classic study, collaborative economy, death of newspapers, delayed gratification, distributed generation, emotional labour, en.wikipedia.org, energy security, feminist movement, Ford Model T, global village, Great Leap Forward, hedonic treadmill, hydrogen economy, illegal immigration, income inequality, income per capita, interchangeable parts, Intergovernmental Panel on Climate Change (IPCC), Internet Archive, invention of movable type, invention of the steam engine, invisible hand, Isaac Newton, James Watt: steam engine, Johann Wolfgang von Goethe, Lewis Mumford, Mahatma Gandhi, Marshall McLuhan, means of production, megacity, meta-analysis, Milgram experiment, mirror neurons, Nelson Mandela, new economy, New Urbanism, Norbert Wiener, off grid, off-the-grid, out of africa, Peace of Westphalia, peak oil, peer-to-peer, planetary scale, Recombinant DNA, scientific management, scientific worldview, Simon Kuznets, Skype, smart grid, smart meter, social intelligence, supply-chain management, surplus humans, systems thinking, the medium is the message, the scientific method, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, theory of mind, Tragedy of the Commons, transaction costs, upwardly mobile, uranium enrichment, working poor, World Values Survey

Every type of economic activity is calculated in the GDP, including the building of more prisons, enlarging the police force, military spending, spending for cleaning up pollution, increased health-care costs resulting from cigarette smoking, alcohol, and obesity, as well as the advertising spent to convince people to smoke and drink more or eat processed and fatty fast food. Simon Kuznets, the man who invented GDP, warned in his first report to the U.S. Congress in 1934 that “[t]he welfare of a nation can . . . scarcely be inferred from a measurement of national income.”38 Thirty years later Kuznets addressed the subject of GDP’s inherent limitations even more strongly writing that “[d]istinctions must be kept in mind between quantity and quality of growth. . . .


pages: 1,034 words: 241,773

Enlightenment Now: The Case for Reason, Science, Humanism, and Progress by Steven Pinker

3D printing, Abraham Maslow, access to a mobile phone, affirmative action, Affordable Care Act / Obamacare, agricultural Revolution, Albert Einstein, Alfred Russel Wallace, Alignment Problem, An Inconvenient Truth, anti-communist, Anton Chekhov, Arthur Eddington, artificial general intelligence, availability heuristic, Ayatollah Khomeini, basic income, Berlin Wall, Bernie Sanders, biodiversity loss, Black Swan, Bonfire of the Vanities, Brexit referendum, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, carbon tax, Charlie Hebdo massacre, classic study, clean water, clockwork universe, cognitive bias, cognitive dissonance, Columbine, conceptual framework, confounding variable, correlation does not imply causation, creative destruction, CRISPR, crowdsourcing, cuban missile crisis, Daniel Kahneman / Amos Tversky, dark matter, data science, decarbonisation, degrowth, deindustrialization, dematerialisation, demographic transition, Deng Xiaoping, distributed generation, diversified portfolio, Donald Trump, Doomsday Clock, double helix, Eddington experiment, Edward Jenner, effective altruism, Elon Musk, en.wikipedia.org, end world poverty, endogenous growth, energy transition, European colonialism, experimental subject, Exxon Valdez, facts on the ground, fake news, Fall of the Berlin Wall, first-past-the-post, Flynn Effect, food miles, Francis Fukuyama: the end of history, frictionless, frictionless market, Garrett Hardin, germ theory of disease, Gini coefficient, Great Leap Forward, Hacker Conference 1984, Hans Rosling, hedonic treadmill, helicopter parent, Herbert Marcuse, Herman Kahn, Hobbesian trap, humanitarian revolution, Ignaz Semmelweis: hand washing, income inequality, income per capita, Indoor air pollution, Intergovernmental Panel on Climate Change (IPCC), invention of writing, Jaron Lanier, Joan Didion, job automation, Johannes Kepler, John Snow's cholera map, Kevin Kelly, Khan Academy, knowledge economy, l'esprit de l'escalier, Laplace demon, launch on warning, life extension, long peace, longitudinal study, Louis Pasteur, Mahbub ul Haq, Martin Wolf, mass incarceration, meta-analysis, Michael Shellenberger, microaggression, Mikhail Gorbachev, minimum wage unemployment, moral hazard, mutually assured destruction, Naomi Klein, Nate Silver, Nathan Meyer Rothschild: antibiotics, negative emissions, Nelson Mandela, New Journalism, Norman Mailer, nuclear taboo, nuclear winter, obamacare, ocean acidification, Oklahoma City bombing, open economy, opioid epidemic / opioid crisis, paperclip maximiser, Paris climate accords, Paul Graham, peak oil, Peter Singer: altruism, Peter Thiel, post-truth, power law, precautionary principle, precision agriculture, prediction markets, public intellectual, purchasing power parity, radical life extension, Ralph Nader, randomized controlled trial, Ray Kurzweil, rent control, Republic of Letters, Richard Feynman, road to serfdom, Robert Gordon, Rodney Brooks, rolodex, Ronald Reagan, Rory Sutherland, Saturday Night Live, science of happiness, Scientific racism, Second Machine Age, secular stagnation, self-driving car, sharing economy, Silicon Valley, Silicon Valley ideology, Simon Kuznets, Skype, smart grid, Social Justice Warrior, sovereign wealth fund, sparse data, stem cell, Stephen Hawking, Steve Bannon, Steven Pinker, Stewart Brand, Stuxnet, supervolcano, synthetic biology, tech billionaire, technological determinism, technological singularity, Ted Kaczynski, Ted Nordhaus, TED Talk, The Rise and Fall of American Growth, the scientific method, The Signal and the Noise by Nate Silver, The Spirit Level, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, total factor productivity, Tragedy of the Commons, union organizing, universal basic income, University of East Anglia, Unsafe at Any Speed, Upton Sinclair, uranium enrichment, urban renewal, W. E. B. Du Bois, War on Poverty, We wanted flying cars, instead we got 140 characters, women in the workforce, working poor, World Values Survey, Y2K

In the absence of an Income Distribution Authority that parcels out identical shares, some people are bound to take greater advantage of the new opportunities than others, whether by luck, skill, or effort, and they will reap disproportionate rewards. An increase in relative inequality (measured by the Gini or income shares) is not mathematically necessary, but it is highly likely. According to a famous conjecture by the economist Simon Kuznets, as countries get richer they should get less equal, because some people leave farming for higher-paying lines of work while the rest stay in rural squalor. But eventually a rising tide lifts all the boats. As more of the population gets swept into the modern economy, inequality should decline, tracing out an inverted U.


Growth: From Microorganisms to Megacities by Vaclav Smil

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, agricultural Revolution, air freight, Alan Greenspan, American Society of Civil Engineers: Report Card, Anthropocene, Apollo 11, Apollo Guidance Computer, autonomous vehicles, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, Boeing 747, Bretton Woods, British Empire, business cycle, caloric restriction, caloric restriction, carbon tax, circular economy, colonial rule, complexity theory, coronavirus, decarbonisation, degrowth, deindustrialization, dematerialisation, demographic dividend, demographic transition, Deng Xiaoping, disruptive innovation, Dissolution of the Soviet Union, Easter island, endogenous growth, energy transition, epigenetics, Fairchild Semiconductor, Ford Model T, general purpose technology, Gregor Mendel, happiness index / gross national happiness, Helicobacter pylori, high-speed rail, hydraulic fracturing, hydrogen economy, Hyperloop, illegal immigration, income inequality, income per capita, industrial robot, Intergovernmental Panel on Climate Change (IPCC), invention of movable type, Isaac Newton, James Watt: steam engine, knowledge economy, Kondratiev cycle, labor-force participation, Law of Accelerating Returns, longitudinal study, low interest rates, mandelbrot fractal, market bubble, mass immigration, McMansion, megacity, megaproject, megastructure, meta-analysis, microbiome, microplastics / micro fibres, moral hazard, Network effects, new economy, New Urbanism, old age dependency ratio, optical character recognition, out of africa, peak oil, Pearl River Delta, phenotype, Pierre-Simon Laplace, planetary scale, Ponzi scheme, power law, Productivity paradox, profit motive, purchasing power parity, random walk, Ray Kurzweil, Report Card for America’s Infrastructure, Republic of Letters, rolodex, Silicon Valley, Simon Kuznets, social distancing, South China Sea, synthetic biology, techno-determinism, technoutopianism, the market place, The Rise and Fall of American Growth, three-masted sailing ship, total factor productivity, trade liberalization, trade route, urban sprawl, Vilfredo Pareto, yield curve

Its oft-repeated definition seems straightforward: GDP expresses the monetary value of all final goods and services that are produced or provided within the borders of a country during a specified period of time (monthly or quarterly in national reports, per year for international comparisons). But measuring GDP growth, and hence ascertaining its disappointing or satisfactory rates, is an inherently difficult matter and one whose systematic practice is quite recent. Its origins go back to the 1930s when Simon Kuznets was asked by the US Congress to estimate the country’s national income (Kuznets 1934). Its scope was defined by John Maynard Keynes, the measure became a key tool for the international financial institutions set up by the Bretton Woods agreement in 1944, and it was widely applied for the first time to the growing post-WWII economies (Coyle 2014).


George Marshall: Defender of the Republic by David L. Roll

anti-communist, Bletchley Park, British Empire, Charles Lindbergh, Cornelius Vanderbilt, David Brooks, Defenestration of Prague, Donald Trump, European colonialism, fear of failure, invisible hand, MITM: man-in-the-middle, Monroe Doctrine, mutually assured destruction, one-China policy, one-state solution, Ralph Waldo Emerson, Simon Kuznets, South China Sea, Steve Jobs, Suez canal 1869, trade liberalization, Works Progress Administration, yellow journalism

Army Eighth Air Force bombed railroad yards near Rouen, the first attack by American bombers on Nazi-occupied Europe. This modest success fueled the hopes and ambitions of airpower advocates. By mid-September, Marshall signed off on a recommendation to expand the number of army air groups from 115 to 273, an aspirational goal that prevailed for the rest of the war.7 Meanwhile, economists working under Simon Kuznets and Robert R. Nathan at the War Production Board circulated a 140-page report, claiming that it was not feasible for the American economy to expand fast enough to supply an army of more than 100 divisions by the end of 1943 and at the same time meet the needs of the navy, the army air force, the civilian workforce, and the British and Soviet allies who were relying on lend-lease aid.


pages: 1,205 words: 308,891

Bourgeois Dignity: Why Economics Can't Explain the Modern World by Deirdre N. McCloskey

"Friedman doctrine" OR "shareholder theory", Airbnb, Akira Okazaki, antiwork, behavioural economics, big-box store, Black Swan, book scanning, British Empire, business cycle, buy low sell high, Capital in the Twenty-First Century by Thomas Piketty, classic study, clean water, Columbian Exchange, conceptual framework, correlation does not imply causation, Costa Concordia, creative destruction, critique of consumerism, crony capitalism, dark matter, Dava Sobel, David Graeber, David Ricardo: comparative advantage, deindustrialization, demographic transition, Deng Xiaoping, do well by doing good, Donald Trump, double entry bookkeeping, electricity market, en.wikipedia.org, epigenetics, Erik Brynjolfsson, experimental economics, Ferguson, Missouri, food desert, Ford Model T, fundamental attribution error, Garrett Hardin, Georg Cantor, George Akerlof, George Gilder, germ theory of disease, Gini coefficient, God and Mammon, Great Leap Forward, greed is good, Gunnar Myrdal, Hans Rosling, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, Hernando de Soto, immigration reform, income inequality, interchangeable parts, invention of agriculture, invention of writing, invisible hand, Isaac Newton, Islamic Golden Age, James Watt: steam engine, Jane Jacobs, John Harrison: Longitude, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kenneth Arrow, knowledge economy, labor-force participation, lake wobegon effect, land reform, liberation theology, lone genius, Lyft, Mahatma Gandhi, Mark Zuckerberg, market fundamentalism, means of production, middle-income trap, military-industrial complex, Naomi Klein, new economy, Nick Bostrom, North Sea oil, Occupy movement, open economy, out of africa, Pareto efficiency, Paul Samuelson, Pax Mongolica, Peace of Westphalia, peak oil, Peter Singer: altruism, Philip Mirowski, Pier Paolo Pasolini, pink-collar, plutocrats, positional goods, profit maximization, profit motive, public intellectual, purchasing power parity, race to the bottom, refrigerator car, rent control, rent-seeking, Republic of Letters, road to serfdom, Robert Gordon, Robert Shiller, Ronald Coase, Scientific racism, Scramble for Africa, Second Machine Age, secular stagnation, seminal paper, Simon Kuznets, Social Responsibility of Business Is to Increase Its Profits, spinning jenny, stakhanovite, Steve Jobs, tacit knowledge, TED Talk, the Cathedral and the Bazaar, The Chicago School, The Market for Lemons, the rule of 72, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, total factor productivity, Toyota Production System, Tragedy of the Commons, transaction costs, transatlantic slave trade, Tyler Cowen, Tyler Cowen: Great Stagnation, uber lyft, union organizing, very high income, wage slave, Washington Consensus, working poor, Yogi Berra

Gregory Clark (2009) argues that Maddison’s figure of a little over a dollar a day in 1800 is too low for subsistence. 5. “World,” CIA World Factbook (accessedApril 10, 2013). 6. The economic historian Stefano Fenoaltea and the economist Philipp Lepenies have both pointed out to me recently that for short-run reasons of policy at the time, the concept of national product used by Simon Kuznets, the deviser of the modern program of income measurement, and eventually by Maddison, did not go beyond trading figures, that is, what people could buy. Homework is mostly ignored. It is a major error for the long run (as Kuznets and other students of the matter realized), since production in the home of, say, made clothing and processed food was a large part of consumption in earlier times, as was at all times the care industry for children, husbands, and parents (as the economist Nancy Folbre has persuasively argued).